The COVID-19 pandemic has led to a sharp decline in remittances, the money that migrant workers send home to their families. The World Bank forecasts a reduction of almost 20% to €401 billion globally, the sharpest yearly decline in recent history.
On International Day of Family Remittances, Commissioner for International Partnerships Jutta Urpilainen said, “Remittances are a lifeline that millions depend on. Falling remittances due to COVID-19 will exacerbate economic hardship and deepen existing vulnerabilities for many. The European Union is determined not to leave the migrants and their families cope with this crisis alone. We should help those who help – migrants are often key workers in host societies and key providers for their families. We are working to raise awareness, build alliances and promote coordinated efforts to that end."
The EU and its Member States are working on multiple fronts to help tackle the challenges that COVID-19 poses to the remittance community. During lockdown, several Member States for example declared money transfer operators as “essential services”, which enabled them to keep operating.
In Ghana, The Gambia and Senegal, the EU-supported “PRIME Africa” programme is helping bring together public and private stakeholders in National Remittance Task Forces with the aim of addressing the implications of the pandemic jointly.
The Commission also participates in developing wider operational measures in the Remittance Community Task Force led by the International Fund for Agricultural Development. The developed guidelines include for example accelerating the shift towards digital remittances, which can be safer, cheaper, and easier to access in lockdown conditions.
As part of its global response to COVID-19, the Commission is about to start funding a project to promote the digital transfer of remittances in the African, Caribbean and Pacific region. This support is part of larger investment in expanding digital and financial infrastructures.
The European Commission has also submitted a paper to the “Global Partnership on Financial Inclusion” of the G20, proposing to include in the group’s work programme a coordinated response to the impact of COVID-19 on remittances.
Remittances directly affect one billion people: 200 million migrant workers send them to help feed, shelter, educate and support the health of 800 million family members in more than 125 developing nations. On average, remittances represent 60% of the recipients’ family income.
Diaspora remittances also contribute to productive investment in developing countries. The programme “Platform for Remittances, Investments and Migrants’ Entrepreneurship in Africa” (PRIME Africa) aims to improve the management of remittances and their use for development outcomes. The platform supports nine African countries (Cabo Verde, Senegal, The Gambia, Ghana, Kenya, Ethiopia, Uganda, South Africa and Morocco) in setting up innovative businesses that make transferring remittances cheaper and faster.
Migrants living in the European Union send on average €63 billion per year to their families. The EU’s recently approved Revised Cross-Border Payment Regulation makes the market more transparent as it mandates the disclosure of the total cost of digital remittances within the European Union.
- Publication date
- 16 June 2020
- Directorate-General for International Partnerships