Rural families are the most affected by the Covid 19 pandemic as remittances continue to decline globally.
International Fund for Agricultural Development (Ifad)) Senior Technical Specialist, Coordinator, Financing Facility for Remittances Pedro de Vasconcelos say the global economic situation could push rural families to even deeper poverty levels.
Globally majority of migrant workers are from low and middle income countries.
It is estimated that the world’s 200 million migrant workers send money regularly to 800 million family members to help them access food, health and education.
Speaking in Rome, Italy during a question and answer reporting online session organized by the Thomson Reuters Foundation as part of a Covid-19 professional development programme run in association with Ifad, Mr Vascocelos asked governments globally to work together to ensure remittance flow does not fall drastically.
“I am calling on all governments to act fast and minimize the impact of the drop in remittances on food security of rural families,” said Mr Vascocelos.
The overall flow of remittances globally is $500 billion.
“The pandemic has caused many migrants to lose their jobs making it difficult to send monies to their families,” he said.
Remittances in 2019 reached a record of $554 billion overtaking foreign direct investment flows to low and middle income countries.
The Covid-19 pandemic is expected to lead to a 20 percent decline in migrant remittance flow to the low and middle income countries.
According to the latest data from the Central Bank of Kenya (CBK) remittances dropped by Sh2.2 billion in April to Sh22.3 billion compared to Sh24.5 billion received in March in Kenya.
The report showed that remittance flow from united States and Canada remained largely unchanged from March while inflows from United Kingdom, Germany and South Africa, EAC region, United Arab Emirates and Saudi Arabia declined because of the negative impacts of Covid-19.
The pandemic is expected to disrupt economic activities around the world.
Mr Vascocelos said, governments must come up with innovative business solution to support families that depend on remittances.
He also said that the global community should promote fee reductions by developing products to enable migrant’s workers to transfer non-financial products through remittance services such as find, medicine, directly to their families.
Mr Vascocelos said Ifad is currently leading the UN sponsored Remittances Community Task Force which has over 35 stakeholders to different sectors to a series of comprehensive and integrated recommendations.
He said digital remittance is becoming the most effective solutions that is bringing change to the global economy.
The global demand for digital remittance is expected to expand due to a growing need for easier, more reliable and quicker cross border monetary transactions.