Remittances on the rise, World Bank figures show
Malawians resident in foreign countries are sending back home more money, indicating a continued supply of critical lifeline for the poor and vulnerable households, World Bank data shows.
Published World Bank data shows that between January and April this year, the country received about $97 million (about K100 billion) in inward remittances, a rise from about $88 million (K91 billion) during the same period last year.
However, despite the rise, net remittances are declining, limiting their roles as a foreign exchange earner.
Says the bank in its recent country analysis: “It is unclear what exactly has caused this shift or what the destination of these outflows is.
“However, they limit the role of net remittances as a foreign exchange earner.”
The World Bank said remittance inflows reached record levels in 2021 at a monthly average of $25 million (about K26 billion).
However, Malawi is also recording significant remittance outflows for the first time, with a monthly average of $13 million (about K13.4 billion) in 2021.
This trend continued in the first four months of 2022, with monthly inflows of $21 million (about 22 billion) being counteracted by $16 million (about K16.5 billion) in outflows.
International Fund for Agricultural Development (Ifad) figures show that over 50 percent of remittances are sent to households in rural areas, where 75 percent of the world’s poor and food-insecure live for improving their livelihoods, increasing their resilience, and achieving their sustainable development goals.
In times of crisis, migrant workers send more money back home to cover crop losses or family emergencies.
The remaining 25 percent of remittances can be either saved or invested in asset-building or activities that generate income and jobs.
Ifad data shows that more than 70 countries rely on remittances for at least four percent of their gross domestic product.
Cynthia Bayani, a Blantyre Rural resident and a mother of two, says with the rising cost of living and dwindling economic activity in the country, her family is surviving on remittances from her husband in South Africa.
She said: “We are just fortunate that the kwacha was devalued and now when my husband sends home money for our upkeep, we are able to keep up with the rising cost of living.”
Centre for Social Concern economic governance officer Benard Mphepo said remittances matter now more than ever, particularly in rural areas where they count the most and provide further opportunities towards rural transformation.
RBM figures show that in 2020, the country received $214.5 million (about K169 billion) in personal remittances, a drop from $265.7 million (about K208 billion) in 2019.
