2023-06-17 14:01:52
Morocco has secured second place among the top recipients of remittances in the Middle East and North Africa region, according to the latest World Bank report on migration and development.
Morocco is positioned as the second recipient country of remittances in the Middle East and North Africa region, according to the latest World Bank report on migration and development. Remittances to Morocco reached $11.2 billion in 2022, representing approximately 6.6% of the country’s gross domestic product (GDP).
Egypt leads the region with remittances of $28.3 billion, followed by Lebanon with $6.4 billion and Jordan with $5 billion. Globally, the top five countries receiving remittances in 2022 were India with $111 billion, Mexico with $61 billion, China with $51 billion and the Philippines with $38 billion. The World Bank report highlights that remittances to Morocco have been supported by the economic recovery in the Eurozone, where a large number of Moroccan expatriates live, particularly in France, Spain, Belgium and the The Netherlands.
During the first quarter of 2023, remittances to Morocco increased by around 7% to reach $2.6 billion compared to the same period in 2022. This exceeded both tourism receipts and inflows foreign direct investment (FDI). The outlook for remittances in the Middle East and North Africa region for 2023 is positive, according to the World Bank, which forecasts a resumption of flows with the decline in oil prices, highlighting in particular the expected rebound in remittances to Egypt. According to the report, remittances to the Middle East and North Africa region decreased by around 4% in 2022, reaching $64 billion.
This drop is mainly due to a 10% drop in flows to Egypt (amounting to $28.3 billion), as well as lower flows to Algeria and Jordan. The report also forecast that flows to the Middle East and North Africa region would recover from a decline of 3.8% in 2022 to an increase of 1.7% in 2023 and 1.8% in 2024, respectively. “Remittances have become a financial lifeline in many economies through the pandemic and will become even more so in the foreseeable future,” said Dilip Ratha, lead author of the Migration and Remittances report and Director by KNOMAD.
Remittances have played a crucial role as the main source of external inflows for the developing Middle East and North Africa region, overtaking official development assistance (ODA) and foreign investment (FDI) combined, accounting for 57% of total inflows in 2022. Given the uncertainty surrounding the global outlook and private sector flows due to the Russian invasion of Ukraine, the report suggests that remittances and ODA will likely remain vital for the region in the medium term.
Factors influencing remittances to Morocco
Remittances to Morocco are influenced by several economic, social and political factors. Among these factors are:
- The economic situation in the host countries of Moroccan migrants, in particular the euro zone, which represents approximately 80% of remittances to Morocco. Stronger economic growth in these countries translates into increased incomes and job opportunities for migrants, allowing them to send more money back to their families in Morocco.
- The economic situation in Morocco, which affects the needs and expectations of remittance recipients. Lower economic growth in Morocco results in increased poverty and unemployment, which increases the demand for remittances to cover basic expenses and productive investments. Stronger economic growth in Morocco translates into improved living standards and employment opportunities, which reduces dependence on remittances and promotes savings and investment.
- The political and security situation in the host and origin countries of Moroccan migrants, which affects migration flows and remittances. A more stable political and security situation in these countries translates into easier migration movements and money transfers, as well as increased confidence among migrants in the future. A more unstable political and security situation in these countries translates into an obstacle to migratory movements and remittances, as well as increased uncertainty among migrants regarding the future.
- Migration and financial policies in the host and origin countries of Moroccan migrants, which affect the costs and modalities of remittances. More favorable migration and financial policies in these countries result in reduced costs and risks associated with remittances, as well as a diversification of money transfer channels and services. Less favorable migration and financial policies in these countries result in increased costs and risks associated with remittances, as well as limited money transfer channels and services.
The impacts of remittances on the development of Morocco
Remittances have a positive impact on Morocco’s development at several levels. These impacts include:
- The impact on the income and consumption of recipient households, which represents regarding 80% of the use of remittances in Morocco. Remittances help increase household disposable income, reduce poverty and inequality, improve food security and nutrition, increase access to health care and education, and build resilience in the face of economic and climatic shocks.
- The impact on the savings and investment of recipient households, which represents regarding 20% of the use of remittances in Morocco. Remittances help increase household financial and non-financial savings, finance the purchase or construction of housing, support entrepreneurship and job creation, stimulate local and rural development, and promote the transfer of skills and technologies.
- The impact on the Moroccan labor market, which results from the interaction between migration flows and remittances. Migratory flows contribute to reducing the demographic pressure on the Moroccan labor market, to increasing the level of education and qualification of Moroccan workers, to diversifying the sources of income of Moroccan households, and to creating a demonstration effect for young Moroccans . Remittances help increase domestic demand for goods and services produced in Morocco, stimulate economic growth and job creation, strengthen the bargaining power of Moroccan workers, and create an incentive effect for young people Moroccans.
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