Malawian households have experienced an 80 percent drop in remittances, as a result of the prevailing Covid pandemic.
This is coming against the background of Malawi’s remittances shifting considerably in recent years, with an increase through the 2000/19 financial year, ending at $217 million dollars (K171 billion) in 2019.
As a result of the sharp global slowdown, the remittances were negatively affected.
Furthermore, according to a World Bank report published last week, sub-Saharan Africa is still the most expensive region to send money to, with an 8.19 percent cost on average in Q4 of 2020, and South Africa being the most expensive G20 country to send money from, with a cost of 16 percent to send $200 (K158, 482) to Malawi.
Notably, data released by the International Organisation for Migration in 2015 showed Malawi’s remittances being more favourable in past trends, especially during the periods from 1994 to 2012.
“There is evidence that remittances from Malawians in diaspora are increasing rapidly after having risen as a share of gross domestic product (GDP) from merely 0.1 percent in 1994 to 0.67 percent in 2012, representing well over a six-fold increase over the period. This trend suggests that remittances offer real prospects for continued growth and importance to the country’s economic development,” the report reads.
This is a sharp change from the current decline in remittances.
University of Malawi economics lecturer Leston Manja said the decrease in remittances to the country are in line with the current economic problems the country has been facing, and believes that it could take some time before these trends increase again.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.