Life, Africa

Families suffer as East Africa remittances dry out

Remittance flows providing economic lifeline to poor families expected to fall significantly due to COVID-19

Kizito Makoye   | 30.08.2020
Families suffer as East Africa remittances dry out

DAR ES SALAAM, Tanzania 

Julius Minani and his 32-year-old friend Kaduna spent weeks squatting in a dilapidated shack in Alexandria in Johannesburg.

The pair had been evicted from an apartment due to outstanding rent.

Their troubles began in April, when Minani, a chef, was laid off from a fast-food chain restaurant after his bosses complained about a loss of business due to the coronavirus virus, forcing the business to close.

Distraught, Minani, a Burundi native, had been trying to find work but failed due to the imposed lockdown and social distancing restrictions.

“We were literary starving, and couldn’t sustain ourselves as our savings dried out,” Minani told Anadolu Agency.

Minani, who moved to South Africa three years ago in search of greener pastures, is among the many migrant workers who have lost jobs because of economic difficulties triggered by the deadly virus.

Lockdowns travel bans and social distancing measures imposed by governments to quell the spread of the pandemic have pushed the global economy to a virtual standstill.


Double tragedy

Thousands of African migrant workers forced to return home after losing work, face unemployment and poverty in their own countries, according to the International Labour Organization (ILO).

In host countries, sectors that depend on migrant workers have suffered due to an increased risk of infections and loss of work, wages and health insurance coverage, the labor agency said.

The coronavirus crisis was expected to wipe out 6.7% of working hours globally in the second quarter on 2020 -- equivalent to 195 million full-time workers, said the ILO.

Sectors most at risk include accommodation, food services, manufacturing, retail, business and administrative activities.

Wrecked by crippling unemployment and business disruption, migrants’ families at home have suffered a double tragedy due to the loss of remittances.

“Many migrant workers, who have lost their jobs in the host countries had returned when travel restrictions eased, although they might wish to go back after some time,”, the Director of the ILOs

Condition of Work and Equality Department, Manuela Tomei, told Anadolu Agency.

There are approximately 164 million migrant workers globally, while not all have returned home, ILO said many would.


One more try

Minani, who returned to his village in Burundi in June, has not been able to find meaningful work and is considering going back to Johannesburg.

“I would like to go back to Jo’burg when things go back to normal,” he said. “I don’t have anything.”

Remittance flows, which provide an economic lifeline for many poor families in Africa are expected to fall significantly.

The decrease could exacerbate poverty and deny families’ access to much-needed health services, especially in Africa where residents lack social protection, the World Bank said in a report.

The report, “COVID-19 Crisis: Through a Migration Lens,” tracks emerging global trends on migration and remittances flows.

The coronavirus outbreak and measures to stop it have caused severe economic problems in East Africa.

As migrant workers had their hours cut, or completely lost jobs, many were unable to financially support their families at home.

Lucrative enterprise

Migrants sent $689 billion in global remittances in 2018, according to the World Bank, helping fight poverty, boosting household spending on health, education and helped to solve social and economic problems.

But analysts say measures taken to curb the virus will badly reduce the share of money migrant workers send home this year and 2021.

In its sharpest decline in history, global remittances are expected to plummet by about 20% this year, the World Bank said.

Families that depend on remittances are struggling to eke out a living.

In 2020, remittance flows to low- and middle-income countries are expected to drop by around 20% to $445 billion, from $554 billion in 2019, World Bank data show.

Remittances are an important source of revenue.

Across Africa, Nigeria is the largest recipient of remittances, with a whopping $23.8 billion received in 2019, an increase of more than half a billion compared to 2018. Ghana and Kenya are ranked a distant second and third in Africa, with $3.5 billion and $2.8 billion received, respectively.

Feeling the pinch

At Kiomboi village in Tanzania’s drought-hit Singida region, Fortunata Mgaya, 58, was a happy woman until recently.

With her Vocadom Mpesa mobile wallet, money would arrive within seconds -- $200 would be sent by her daughter, Joan, who works in Oman.

It was the only source of income for Mgaya and her family.

It has been two months since Joan last sent money, and with her daughter’s narrowing work opportunities, the future is bleak.

“She was very quick to send me money, but now she hardly sends any,” said Mgaya.

The decline in remittance flows is expected to be sharpest in sub-Saharan Africa. Remittances are expected to fall by 23.1% in 2020 to reach $37 billion, according to the World Bank.

Remittances are expected to further decline, it warned.

The crisis caused by COVID-19 has created mayhem in important sectors that employ migrant workers thus disproportionately affecting food and hospitality, retail and wholesale, tourism and transport, and manufacturing.

“I am stranded financially, but I think the situation will soon stabilize so that I can start sending money to my family,” said Sudi Ahmed, a Tanzanian who works as a logistics technician in Italy.

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