The World Bank has said remittance flows around the world remained resilient in 2020 despite the impact of the Covid-19 pandemic on economies, only registering a smaller decline than previously projected.
The World Bank’s latest Migration and Development Brief, asserts that official recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 percent below the 2019 total figure of $548 billion.
According to the Bretton Wood Institution, the decline in recorded remittance flows in 2020 was smaller than the one during the 2009 global financial crisis (4.8 percent).
It was also far lower than the fall in foreign direct investment (FDI) flows to low- and middle-income countries, which, excluding flows to China, fell by over 30 percent in 2020 which as a result, remittance flows to low- and middle-income countries surpassed the sum of FDI ($259 billion) and overseas development assistance ($179 billion) in 2020.
“The main drivers for the steady flow included fiscal stimulus that resulted in better-than-expected economic conditions in host countries, a shift in flows from cash to digital and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates,” said the World Bank.
“The true size of remittances, which includes formal and informal flows, is believed to be larger than officially reported data, though the extent of the impact of COVID-19 on informal flows is unclear,” added the World Bank.
Remittances from Ghanaians in the diaspora accounted for 5.5 per cent of Gross Domestic Product (GDP) in 2019. This in monetary terms translates into some $3.7 billion.
Official data on remittance inflows to Ghana for 2020 is yet to be made known by government.
