Zimpapers Logo

Sifelani Tsiko

Agric, Environment & Innovations Editor

The economic consequences of the COVID – 19 pandemic is pushing rural families in Africa and most other developing nations even deeper into poverty as thousands of migrant workers lose their jobs, a top International Fund for Agricultural Development (IFAD) official says.

Pedro de Vasconcelos, IFAD programme manager of the multi-donor Financing Facility for Remittances (FFR) says the economic impact of the COVID-19 pandemic has led to the loss of millions of jobs in the developed and developing world for migrant workers.

“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,” he said in a report.

“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.”

IFAD estimates 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,” said de Vasconcelos.

“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.”

He said although in the past remittances had been relatively resilient to external shocks, COVID-19 was different.

“It impacts senders and recipients simultaneously. Families living in rural areas in developing countries have been severely affected by lockdowns and social distancing,” the IFAD official said.

“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.”

IFAD is tracking the impact of declining remittances on the ‘receiving end’ in developing countries, where typical remittances of $200 to $300 per month on average account for 60 per cent of household income.

The fund said while the reduction in remittances will not fall evenly across countries and communities, the impact is likely be substantial in rural areas where remittances count the most.

“We need to act now to minimize the impact of the drop in remittances on the food security of rural families,” said de Vasconcelos.

He said there was urgent need to fast – track innovative business solutions that support remittance families in times of crisis, by promoting fee reductions and by developing products to enable migrant workers to transfer non-financial products through remittance service providers, such as food or medicine, directly to their families.

In addition, he said there was need to promote the use of digital channels for sending and receiving remittances, and disseminate information about available remittance products and ways to obtain them.

“By expanding rural access to digital technology, remittances could support rural transformation, bringing new jobs and opportunities back home,” the IFAD official said.

“Receiving remittances digitally could give rural dwellers access to savings, credit or insurance products can build much needed resilience at family level and benefit the communities around them.”

The World Bank’s latest Migration and Development Brief predicts that international remittances to sub – Saharan Africa will decline by 23 percent in 2020 because of the COVID-19 pandemic, with implications for major recipient countries in the region.

Remittances in Africa have grown tenfold in two decades, from US$4,8 billion in 2000 to US$48 billion in 2018 while the number of migrants grew from 21,6 million in 2000 to 36,3 million in 2017.

To address a number of the challenges facing rural communities, IFAD is currently leading the UN-sponsored Remittances Community Task Force, a group of 35 stakeholders of different sectors, which will soon issue a series of comprehensive and integrated recommendations: A Blueprint for Action.

Zimbabwe’s Diaspora remittances grew by 2,6 percent to US$635 million in 2019 from US$619 million recorded in 2018, according to the Reserve Bank of Zimbabwe (RBZ).

Diaspora remittances have become a major tool of domestic financing in the country and a recent report by Zimcodd suggest Covid – induced lockdown will see most families in the country which used to survive on diaspora remittances facing challenges.