Africans on the continent are looking at losing up to $37 billion in remittances due to the coronavirus pandemic, according to the latest forecast by the World Bank.
Migrant workers have been affected by lockdowns and layoffs across the developed world.
The decline in remittances is the sharpest on record for the continent and the world at large. Monies sent by people globally are expected to fall by $445 billion.
Although many countries do not count remittances as part of foreign direct investment, a substantial amount of Africans depend on remittances from family, friends and acquaintances in especially Europe and North America.
The economic impact of the coronavirus pandemic extends beyond remittances. Last week, the World Bank said the continent is going into a recession for the first time in 25 years.
The Bank’s report said “Covid-19 will cost the region between $37 billion and $79 billion in output losses for 2020 due to a combination of effects.”
It also added that “real gross domestic product growth is projected to fall sharply particularly in the region’s three largest economies — Nigeria, Angola, and South Africa — as a result of persistently weak growth and investment.”
South Africa’s currency, the Rand, initially recorded gains against the dollar prompting hopes in the country that the economy may be able to withstand hammering. South Africa’s Reserve Bank is expected to cut interest rates in May.
Reuters quoted a currency dealer, Andre Botha, who said, “If we look at the market, I think people are taking a pause for a moment. I think the market is exhausted and is just taking stock of where we are.”
All of Africa’s biggest economies have been impacted by various levels of restrictions to mitigate the spread of the coronavirus.
