Portugal: Emigrant remittances fall for first time in ten years

Remittances from Portuguese emigrants fell 1.3% in 2020 compared to the previous year, dropping to €3.6 billion, the first drop in at least a decade, due to the Covid-19 pandemic.

According to data from the Bank of Portugal, consulted by Lusa on the occasion of the International Day of Family Remittances which is celebrated today, the reduction in the value of transfers in 2020 to €3.6128 billion happens for the first time since at least 2010, the year in which emigrants sent €2.425 billion to Portugal, but above the value recorded in 2018 when €3.604 billion were remitted by Portuguese workers abroad.

Among Portuguese-speaking African countries, remittances are particularly relevant in Cabo Verde, where the amounts sent by the diaspora exceeded €200 million for the first time last year.

According to data from an April report by the Bank of Cabo Verde (BCV), remittances sent by Cabo Verdean emigrants increased from 21.3 billion escudos (€192 million) in 2019 to 22.27 billion escudos (€200.8 million) in 2020, a new all-time high.

“The altruism of emigrants was sustained by the budgetary support they enjoyed in their host countries and contributed to sustaining the positive evolution of consumer confidence [in Cabo Verde], despite the downward profile,” the central bank report states.

In the document, the BCV recognises that in the midst of the crisis caused by the Covid-19 pandemic – the economic recession of 14.8% in 2020, due to the practically total absence of tourism – the “disposable income of families was also supported by remittances from emigrants,” which thus grew 4.5% in one year.

Cabo Verde’s prime minister, Ulisses Correia e Silva, recognised last December in parliament the importance to the national economy of remittances sent by emigrants, which continued to grow and now represents 11.3% of Cabo Verde’s gross domestic product (GDP).

“The contributions of emigrants’ remittances have been important throughout Cabo Verde’s history. They are important for families, for financing the Cabo Verdean economy and also show that confidence has increased, even during the pandemic period,” he said in a monthly debate in parliament.

The prime minister explained that remittances were worth 10.6% of GDP on average between 2012 and 2015 but had risen to 11.3% in the 2016 to 2019 period.

The population of Cabo Verde is estimated at 550,000. Still, over a million Cabo Verdeans live in Europe and the United States of America, and the financial system is dependent on remittances from these emigrants.

According to 2019 data, remittances from Cabo Verdean emigrants based in Portugal were worth about 30% of the total, according to previous BCV data. Cabo Verdeans in Portugal sent 5.68 billion escudos (€51.5 million) in remittances in 2019, up 6.7% from the previous year.