June 30, 2020
Fiji has joined Vanuatu and the Pacific Islands Forum Secretariat in voicing support for a global call to action which aims to mitigate a predicted reduction in remittances following the COVID-19 crisis. The call to action, Remittances in Crisis – How to Keep Them Flowing, highlights the importance of keeping remittance channels accessible and affordable for migrants and their families during the COVID-19 crisis.
Remittances are vital to Fiji’s economy, representing the second-largest source of foreign reserve and a crucial source of income to many Fijians. Many families rely on remittances from their family members living abroad to cover household expenses such as food, medical bills and housing costs. Due to the global economic impact of COVID-19 remittances are expected to decline by 20 percent during 2020.
Migrants are experiencing a loss of wages or employment and are, therefore, sending less money home. This not only adversely affects the family members relying on those remittances, but also has a knock-on effect on the local economy. Remittance service providers are suffering from both this decrease and restrictions placed on their businesses by lockdowns and social distancing measures. The call to action addresses measures which policymakers, regulators and remittance service providers could take to improve migrants’ access for sending and receiving remittances and to reduce transfer costs during the ongoing COVID-19 pandemic.
Vodafone Fiji, in partnership with the Pacific Financial Inclusion Programme, has already taken action to reduce transfer costs. In May they announced that they would waive all fees for both domestic and international remittances made using the M-PAiSA payment platform for two months. While pre-COVID remittances averaged around 6,500 transaction per month with a value of a bit over US$900,000, with the free-free initiative, transaction volumes in May 2020 topped around 22,000 transactions with a value of over US$3.1 million.
The Governor of the Reserve Bank of Fiji, Mr Ariff Ali, who is coordinating Fiji’s support for the call to action, applauded Vodafone’s actions back in May; “This will help in much needed foreign currency during this difficult economic environment to sustain our balance of payments and foreign reserves.”
Spearheaded by the Government of Switzerland and the Government of the United Kingdom, the call to action is also supported by the global knowledge partnership on migration and development KNOMAD, UNCDF and UNDP, the World Bank, the International Organization for Migration (IOM) and the International Association of Money Transfer Networks (IAMTN), and the International Chamber of Commerce (ICC).
More information on the work of UNCDF on remittances during the COVID-19 pandemic can be found here.