The Common Market for East and Southern Africa (Comesa) has tipped Malawi and other member states to undertake financial regulatory reforms to streamline and effectively reduce the costs of remittances.
The bloc’s secretariat was reacting to a recent report by the World Bank which indicates that remittances to Sub-Saharan Africa are expected to decline by 23.1 percent to reach $37 billion in 2020, due to the Covid-19 crisis.
It further projects a recovery of four percent in 2021.
Comesa Director of Trade and Customs, Christopher Onyango, said diaspora remittances are a key source of investments and enabler of economic growth and sustainable development.
“Member States should not only fully implement the protocols on free movement of persons, labour and services and that of elimination of visa requirements, but also develop specific rules and regulations to guide and harness remittances as a critical source of economic growth and development,” Onyango said.
In a recent interview, Reserve Bank of Malawi spokesperson, Mbane Ngwira, said in 2019 formal receipts from diaspora amounted to $265.7 million against a target of $250 million.
“Our target for 2020 is $300 million. As of now we have not fully assessed the impact of Covid-19 on remittances. It may go either way as diaspora try to assist Malawians to mitigate the effects of Covid-19 they may increase remittances on the other hand if their incomes are negatively affected the capacity to remit more may not be there,” Ngwira said.
In the Comesa region, the leading recipients of remittances in 2019 were Egypt at $26.7 billion, Kenya at $2.8 billion, Tunisia at $1.9 billion, DR Congo at $1.8 billion and Zimbabwe at $635 million.
Remittances are funds or money that is sent by a foreign worker back to their own country.