The Impact of COVID-19 on Remittance
Remittances are a key source of finance for many developing countries. As COVID-19 devastated lives and livelihoods around the world, remittances continued to provide an essential lifeline for poor and vulnerable groups, helping to meet their increased need for livelihood support during the pandemic.
Contrary to predictions, overall remittance flows remained resilient in 2020 rising in Latin America and the Caribbean (+6.5%), the Middle East and North Africa (+2.3%), South Asia (+5.2%) and falling in East Asia and Pacific (-7.9%), Europe and Central Asia (-9.7%), Sub-Saharan Africa (-12.5%, almost entirely due a 28% drop in flows to Nigeria, without which the regional flows would be up by 2.3%), according to the World Bank.
Remittance flows to low- and middle-income countries reached $540 billion in 2020, 1.6% up from 2019 according to the latest Migration and Development Brief. Though down by about $18 billion globally compared to 2019 (-2.43%), this is hardly the picture that was painted for the decline in global remittances at the start of the pandemic. The resilience of these flows is being attributed to fiscal stimulus, the continued digitalisation and formalisation of channels, cyclical oil price movements and currency exchange rates.
Overall change in remittance
Figure 1: Overall change in remittance
Remittance changes by country
Figure 2: Remittance changes by country