Remittances to Morocco jumped by 40% in 2021, says the World Bank in a new report, projecting a slowdown in the growth of these remittances to countries in the MENA region for this year.
“Remittances to the developing countries of the Middle East and North Africa region grew by 7.6 percent in 2021 to $61 billion, driven by robust gains into Morocco (40 percent) and Egypt (6.4 percent),” reads the latest brief from the Washington-based financial institution released this week.
Factors supporting the flows were economic growth in host countries in the European Union as well as transit migration which further boosted inflows to temporary host countries such as Egypt, Morocco, and Tunisia, the World Bank explained.
“In 2022, remittance flows will likely ease to a 6 percent gain. Remittances have long made up the largest source of external resource flows for developing MENA—among ODA, FDI, and portfolio equity and debt flows—accounting for 61 percent of total inflows in 2021”, the report said.
The cost of sending $200 to MENA fell to 6.4 percent in the fourth quarter of 2021 from 6.6 percent a year ago, according to the same source.
Moreover, the World Banks said that officially recorded remittance flows to low- and middle-income countries (LMICs) are expected to increase by 4.2 percent this year to reach $630 billion. This follows an almost record recovery of 8.6 percent in 2021.
The war in Ukraine has also affected the international payment systems with implications for cross-border remittance flows. The exclusion of Russia from SWIFT has added a national security dimension to participation in international payments systems.
“Lowering remittance fees by 2 percentage points would potentially translate to $12 billion of annual savings for international migrants from LMICs, and $400 million for migrants and refugees from Ukraine,” said Dilip Ratha, lead author of the report on migration and remittances and head of KNOMAD.
“The cross-border payment systems, however, are likely to become multipolar and less interoperable, slowing progress on reducing remittance fees”, he added.
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