"Remittances were worth more than investments and official aid in 2020" - World Bank

“Remessas valeram mais que investimentos e ajuda oficial em 2020” – Banco Mundial

Remittances worldwide exceeded the value of Foreign Direct Investment and official aid to the poorest countries last yearThe World Bank says that the pandemic of covid-19 is a major problem.

The reduction in foreign investment and the resilience of remittances meant that the poorest countries received last year more money from emigrants than from investors and donors, who sent, respectively, $259 billion and $179 billion, reveals the World Bank's recently released report on remittances, consulted this Wednesday by Lusa on the occasion of the International Remittances Day.

"Registered official remittance flows to low- and middle-income countries reached $540 billion in 2020, only $1.6% below the 2019 total of $548 billion," the World Bank says.

"The decline in recorded remittance flows in 2020 was smaller than the decline recorded during the 2009 financial crisis, where remittances fell by 4.8%, and was far smaller than the decline in Foreign Direct Investment to low- and middle-income countries which, excluding China, recorded a decline of more than 30% in 2020," the document further points out.

"With covid-19 still devastating families around the world, remittances remain a critical lifeline for the poor and vulnerable," commented the Global Director of the Global Social Protection and Employment Practice at the World Bank, Michal Rutkowski.

By regions, sub-Saharan Africa was the zone that registered the biggest drop (12.5%), greatly influenced by the drop in the amounts sent by Nigerians abroad, which fell 28%, since excluding Nigeria, the most populous country in the region, remittances would have even risen 2.3%.

Remittances sent to sub-Saharan African countries fell 12.5% last year to $42 billion.

The value of remittances increased in Latin America (6.5%), South Asia (5.2% and the Middle East and North Africa by 2.3%, and fell in East Asia and the Pacific (7.9%) and Europe and Central Asia (9.7%), according to data from this multilateral financial institution.

"The flow of remittances to low- and middle-income countries is expected to increase by 2.6% to $553 billion this year and 2.2%, to $565 billion, in 2022," reads the report, which laments the high cost of transactions, which for a $200 remittance are worth $6.5%, more than double the $3% called for in the Sustainable Development Goals.

Sub-Saharan Africa remains the most expensive region, with emigrants having to pay an average of 8.2% in fees for a $200 shipment.

"The resilience of remittance flows is remarkable; remittances are helping families cope with the growing need for support," commented the report's lead author, Dilip Ratha, concluding that "the value at stake can no longer be treated as mere pocket change."

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