Decline of Remittances Puts Rural Families at Risk

The economic impact of the COVID-19 pandemic has led to the loss of millions of jobs in the developed and developing world. Migrant workers are among the most directly affected. They work in economic sectors adversely impacted by the economic slowdown such as construction, the hospitality industry, tourism, food, agribusinesses, transport and domestic work. This loss of income has ripple effects across the world, putting millions of poor rural families at risk.
The majority of migrant workers are from low and middle-income countries who need to support their families through the remittances they send home on a regular basis. It is estimated that the world’s 200 million migrant workers send money regularly to 800 million family members to help them access food, health and education. Therefore, one in nine people in the world are directly impacted by remittance flows.
In 2019, remittances to low and middle-income countries totalled US$554 billion, with about half reaching families living in small towns and rural villages. However as a result of COVID-19, these flows are projected to make their sharpest decline in history, falling by 20 per cent in 2020 to US$445 billion, as indicated by a recent World Bank ( forecast.
Although in the past remittances have been relatively resilient to external shocks, COVID-19 is different. It impacts senders and recipients simultaneously. Families living in rural areas in developing countries have been severely affected by lockdowns and social distancing. Markets have closed and transport has been disrupted. Small-scale farmers have been unable to sell their produce or to buy inputs, such as seeds or fertilizer. Daily labourers, small businesses and informal workers, who are often women and young people, are among the worst affected.
Continue reading at: CNBCAFRICA

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