In spite of the negative trends that have dominated the year, remittances to low- and medium-income countries (LMICs) increased in 2022 by 5% to a total of $626 billion, according to the World Bank’s Migration And Development Summary. Africa was found to have the most expensive cost of sending $200, at 7.8%.
Appreciation of the Ruble and Weaker Euro
The World Bank Migration And Development Report (MDB) states that worldwide remittances to LMICs increased by 5.5% to $626 billion in 2022. The rise is lower than the 10.2% recorded in 2021, and is attributed to the appreciation of the US dollar and the weakening of the euro and Russian ruble.
Michal Rutkowski, Global Director Of Social Protection And Employment at The World Bank, commented on the report:
Migrants are helping to open up labor markets in host nations and are assisting their families through remittances. Inclusive social protection policies have helped workers to combat the uncertainty of income and work caused by the COVID-19 pandemic. These remittances have a worldwide impact and must be maintained.
Africa Most Vulnerable to Simultaneous Crises
The MDB report emphasizes how Africa is the region “most severely exposed to concurrent crises.” The data shows that remittances to sub-Saharan Africa saw a rise of 5.2% this year, which is significantly lower than the 16.4% growth of 2021. The cost of sending $200 to the region was found to be the highest out of six regions surveyed, at 7.8%.
The report suggests the use of digital channels for sending remittances, although it acknowledges that even though the cost is lower than other methods, there are still some issues that make them less attractive. The MDB states:
Digital technologies enable much faster and cheaper remittance services. However, the burden of compliance with anti-money laundering and anti-terrorist financing regulations continues to prevent new service providers from accessing correspondent banks. These regulations also restrict migrants’ access to digital remittance services.
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