Remittances to Africa declined from $85.8 billion in 2019 to $78.3 billion in 2020. In the particular case of Botswana, remittances between 2019 and 2020 declined by -14 percent. Figures from the World Bank show that the most recent (2019) value for personal remittances received in Botswana was P54 million, meaning Batswana living abroad sent that much money home.
The African Development Bank attributes this decline to the COVID-19 pandemic.
“The economic fallout of the pandemic, including lockdowns, job losses, and business closures has affected migrant workers in popular destinations across the world. Many migrant workers—in particular those in low-skill and part-time jobs—work in contact-intensive sectors such as tourism, hospitality, and retail businesses and have suffered job and income losses,” says the bank, adding that migrants also work in health and other essential jobs, where they are disproportionately exposed to COVID–19, which may affect their ability to work and send money home. “Moreover, for the first year in recent decades, international migration decreased in 2020, suggesting that future migrant remittances will moderate until international labor mobility fully resumes.”
This decline is bad news for the continent because remittances are “the most significant source of external financial inflows to Africa” and had been increasing until the pandemic in 2020. Other major inflows, which also declined between 2019 and 2020, include foreign direct investment, portfolio investments, and official development assistance. All have been significantly disrupted by the pandemic. Although remittances have been adversely affected by the COVID–19 pandemic, they have been less volatile and more resilient than foreign direct investment. The bank explains that remittances have also decreased much less than what was initially projected earlier in 2020.
“This resilience can be explained by several factors. Migrants dipped into savings for money to send back home. They were more likely to send remittances through recorded channels and digital means. And many migrants had income from host governments’ cash transfers, which dampened the pandemic’s effect on remittances flows. However, migrants may not be able to keep up this behavior if more policies to support them are not adopted,” the bank says.
