Remittances: Coronavirus

(asked on 28th May 2020) - View Source

Question to the Department for International Development:

To ask the Secretary of State for International Development, if the Government will make an assessment of the potential merits of restarting the Safer Corridor Initiative in light of the recent reduction in remittances from the UK as a result of the covid-19 pandemic and reluctance from banks to support remittance companies.


Answered by
James Duddridge Portrait
James Duddridge
This question was answered on 8th June 2020

The Government recognises the vital role remittances play in supporting the incomes of millions of people around the world – including in Africa, where remittances can represent a significant proportion of GDP. In Somalia remittances represented more than one quarter of its GDP in 2019, and on average made up a third of total income for households that received them.

We are deeply concerned about the impact of COVID-19 in Somalia and other African countries, where millions of people already face food insecurity caused by humanitarian disasters and conflict. This situation will be compounded by a reduction in remittances. Recent projections by the World Bank’s indicate that remittances to sub-Saharan Africa will fall by around 23% – USD 11 billion – in 2020.

We are therefore working closely with our international partners to monitor and mitigate the impacts of COVID-19 on remittance flows. The UK-Somalia Safer Corridor Initiative brought together stakeholders including banks, remittance service providers, regulators and community representatives to tackle barriers in the UK-Somalia remittance corridor. The Government continues to engage regularly with these stakeholders to address the impact of COVID-19 on remittance flows.

The Government understands that UK banks play an important role in maintaining the flow of remittances from the UK to Africa. The Government and the UK’s regulatory authorities have regular engagement with the banking sector in the UK on a wide range of issues, including on the provision of banking services to remittance service providers. The decision to offer banking services is ultimately a commercial decision for banks, which are required by legislation to make these decisions in a proportionate and non-discriminatory way.

On Friday 22 May, the UK and Swiss Governments, with the support of the World Bank and other partners, launched a global Call to Action on remittances. This called on policymakers, regulators and remittance service providers to take action to keep remittances flowing during the crisis

The Government has already taken steps to support remittance service providers in the UK, including by enabling them to remain open through lockdown by including them on the list of essential businesses.

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