Money sent by Ugandans abroad drops by $300m
Remittances across sub Saharan Africa, save for a few coutries, declined due to Covid-19 related disruptions. Photo | File
What you need to know:
- Remittances play a key role in supporting growth of gross domestic product and supporting households in terms of education and medical care, among others.
Remittances from Ugandan workers in the diaspora fell by $300m in 2020, according to data from the World Bank.
Details, which are contained in the World Bank Global Knowledge Partnership on Migration and Development, indicate that remittances, during the period, declined to $1.1b from $1.4b in 2019 as a result of Covid-19-related disruptions on the global economy.
Remittances play a key role in supporting growth of gross domestic product and supporting households in terms of education and medical care, among others.
However, despite the drop, Uganda still remained among the top 10 recipient of remittances, holding a poll position among sub Saharan African countries.
During the period, Nigeria, which received $17.2b, was the largest recipient of remittances in Africa, followed by Ghana ($3.6b), Kenya ($3.1b), Senegal ($2.6b) DR Cong ($1.9b), Somalia ($1.7b), South Sudan ($1.2b), Zimbabwe ($1.2b), Uganda ($1.1b) and Mali ($1b).
The World Bank also noted there was a general decline in remittances to sub-Saharan Africa, which fell by at least 12.5 per cent in 2020 to $42b with Nigeria, whose remittances fell by 27.7 per cent, creating the largest impact.
However, remittance growth was reported in Zambia, which increased by 37 per cent, Mozambique (16 per cent), Kenya (9 per cent) and Ghana (5 per cent).
Remittance flows to sub Saharan Africa in 2021, according to the World Bank are projected to rise by 2.6 per cent, supported by improving prospects for growth in high-income countries.
Meanwhile, the World Bank has expressed disappointment, noting that data on remittance flows to sub-Saharan Africa is sparse and of uneven, with some countries still using the outdated Fourth IMF Balance of Payments Manual instead of the Sixth, while others do not report data at all.
The shift from informal to formal channels due to the closure of borders, the World Bank said, explains in part the increase in the volume of remittances recorded by central banks, amid a number of challenges, which increase the high cost of sending such money.
According to the World Bank, sub-Saharan Africa remains the most expensive region to send money to, where sending $200 costs an average of 8.2 per cent.
Globally, the World Bank said, despite Covid-19 disruptions, remittance flows remained resilient in 2020, registering a smaller decline than previously projected.
Remittances to low- and middle-income countries reached $540b in 2020, just 1.6 per cent below the 2019 total of $548b.
The decline is the second after the one during the 2009 global financial crisis, in which a 4.8 per cent fall was registered.
It was also far lower than the fall in Foreign Direct Investment flows to low- and middle-income countries, which, excluding flows to China, fell by over 30 per cent in 2020.
