By Taonga Sabola
Remittances from Malawians in the diaspora jumped by 55 percent in the first nine months of 2021 as compared to the same period in 2020 as the global economy started opening up, the World Bank has said.
Remittances are when migrants send home part of their earnings in the form of either cash or goods to support their families.
In its 14th Malawi Economic Monitor (Mem) released on Monday, the bank says remittances from January to September were recorded at $217 million.
“On an annual basis, this could reach 2.4 percent of GDP, helping cover about 10 percent of total imports or 20 percent of the trade deficit.
“The largest source of remittances is South Africa, where economic growth is projected at 5 percent in 2021,” reads the Mem.
Over the past years remittances have been growing rapidly and now represent the largest source of foreign income for many developing economies.
In its recent African Regional Review of Implementation of the Global Compact for Safe, Orderly and Regular Migration report, the United Nations Economic Commission for Africa (Uneca) observed that the cost of sending remittances to African countries, including Malawi, is one of the highest in the world.
The report says people sending $200 (about K164,000) to sub-Saharan African countries pay an estimated 8.9 percent or about $18 (about K15,000) of the value of the transaction.
The report urged governments, including Malawi, to support migrants and their families through the adoption of laws and regulations to facilitate the sending and receiving of remittances, money by a foreign worker or a member of a diaspora community to their home country.
Remittances data from the Reserve Bank of Malawi show that, in 2020, Malawi received $214.1 million (about K166.6 billion) in personal remittances, a drop from $265.7 million (about K158.9 billion) recorded in 2019.