Remittances on the rise, hits k13.5 billion
Malawi received about $28.7 million (K13.5 billion at the current exchange rate) in personal remittances in 2013, slightly above the previous year, shoring up the country’s balance of payments (BoP) position and availability of foreign exchange.
Figures from the United Nations Conference on Trade and Development (Unctad), in dollar terms, show that the receipts have been generally rising for the past five years, after dropping in 2008.
Although Unctad has not reported Malawi’s 2013 foreign worker’s payment through remittances in 2013 in 2012, the country received about $17.8 million (K8.4 billion).
The payments have generally been rising over the past decade, having risen 14 times between 2002 and 2003, according to the figures.
Analysts believe that since remittance receivers often have a higher propensity to own a bank account, they promote access to financial services for the sender and recipient, an aspect that promotes economic development.
On the other hand, international trade experts contend that remittances are playing an increasingly large role in the economies of many countries worldwide by contributing to economic growth and helping livelihoods of less prosperous people.
Reserve Bank of Malawi (RBM) earlier said the current liberalised exchange rate system encourages remittances into Malawi and that the central bank is working on a number of initiatives to encourage the receipts.
Last year, while commenting on remittances, RBM spokesperson Mbane Ngwira said available figures do not include remittances in goods, observing that due to the fixed exchange rate that the country was using prior to May 2012, Malawians in diaspora could not send money through the official channels because of differences in exchange rates while others opted to send goods.
But in an interview on Tuesday, he said apart from exchange rate policies, Malawi receives lower cash personal remittances due to inflation, which forces people to send goods whose figures are not captured under the transfer line.
Last year, government initiated labour export deals with Kuwait and Dubai, a move aimed at providing employment to the unemployed, enabling migrants to send some money back home.
Although Unctad has not provided remittances estimates for 2015, RBM figures show that receipts through workers’ remittances this year would rise to $42.1 million (K20 billion) from $35.9 million (K16.9 billion) in 2014.
Compared to other economies in the region, Malawi’s receipts from foreign workers is meager with neighbouring Zambia receiving about $72.8 million (K34.2 billion) while Mozambique’s receipts totaled $220 million (K103.4 billion) in 2013.
A report by the World Bank released in 2012 revealed that Malawi is one of the few African countries which is most expensive to send money to and faulted banks as the most expensive remittance service providers which it said are often the only channel available to African migrants.
