Money sent home by migrant workers in South Africa fell about 80% in April after the hard lockdown was instituted.
South Africa is host to at least 3.7-million migrant workers, whose incomes have been disrupted by the slowing down of economic activity. The lockdown in March resulted in a sharp decrease in remittances because of the strict regulations imposed by the government, which left many migrant workers without employment.
FinMark Trust’s latest report shows that between December and April this year, monthly remittances declined from R955.5-million to R390.8-million. This was a 40.9% decline, dramatically affecting what people like Esther Costa, a Mozambican woman who has been working in South Africa for 22 years, could send home.
According to the World Bank, there are two types of remittances: official and unofficial. The bank’s numbers mostly track the official remittances from banks and money-transfer companies. Remittances are a huge industry in Nigeria, for instance, where they reached $25-billion in 2018 — almost four times more than foreign direct investment and official development assistance combined. In Lesotho, remittances amounted to 16% of the country’s gross domestic product.
Bryan Kelmus, from Harare, Zimbabwe, says that he has had to look for other means to make money since gyms were closed on March 27. Other emerging companies, such as Mama Money and Hello Paisa, said they noticed remittance outflows for certain countries dropped by as much as 90%. Hello Paisa said it has seen a decrease in the average amounts that customers are sending to their loved ones back home. But, as the lockdown regulations are being relaxed, there is a rebound on the horizon as companies notice an uptick since April’s plunge in remittances.
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