Remittances to Yemen plummet as needs surge amid war and coronavirus

There has been an unprecedented decline in the flow of remittances to Yemen ―a vital source of money for millions― just as cases of coronavirus surge and international aid dries up in a country already devastated by more than five years of war. Oxfam is calling on the international community to ensure funding both for Yemen’s coronavirus response and to address the country’s huge humanitarian needs ahead of a pledging conference taking place virtually on Tuesday (2 June).

Money transfer providers in six governorates across Yemen told Oxfam they had seen the number of remittances drop by as much as 80 percent between January and April this year as Yemenis working in Gulf states, the UK and the US saw their incomes plummet due to lockdowns and social distancing.

The World Bank estimates that one in ten people in Yemen wholly rely on money transfers to meet their basic needs. Remittances to Yemen in 2019 totalled $3.8 billion ―13 percent of GDP.

One service provider in Sa’ada said the number of remittances his business had received had dropped from 2500 in January 2020 to barely 100 in March and April ―a reduction of 96 percent. He estimated that up to 30,000 people were dependent on this money.

At the same time suspected cases of coronavirus have surged especially in the country’s southern city of Aden. There have been more than 250 confirmed cases across 10 governorates with 49 deaths. It’s likely the true number is much higher as testing facilities are limited and half the country’s health facilities were already out of service before the virus hit.

Muhsin Siddiquey, Oxfam’s Yemen Country Director said: “Coronavirus is already exacting a terrifying toll on Yemenis; both those suffering directly from the virus and the millions of people hit by the economic fall-out from the pandemic.

“All of this comes on top of more than five years of war which have created a huge humanitarian crisis, hunger, disease and a decimated health system.

“Without the safety net of remittances, more Yemenis may be forced to rely on aid as a lifeline. Although the world is reeling from the virus, the international community needs to make sure that life-saving aid continues to flow to those most in need.”

The vast majority of Yemeni migrants reside and work in Saudi Arabia and other Gulf states. Most are not covered by those states’ economic initiatives to protect jobs and businesses so have faced the loss of their income as well as continued living expenses.

Abu Ameer, who fled fighting near his home in Haradh to Sana’a three years ago, had been relying on money transfers from his son in Saudi Arabia as the only income for his family of seven, but his son had to stop working in April due to lockdown. Ameer said: “Since then, I purchase food on credit from the grocery and have two months overdue rent. I hope my son will be able to work and send money soon to pay what we owe and feel secure again.’’

Remittances are an important source of foreign currency, helping to stabilize Yemen’s hard-hit economy. Yemen’s Central Bank is the main funding body for imports which the country relies on for basic supplies including oil, food and medicine. The Yemeni Rial experienced a sharp depreciation in 2018 which pushed up the cost of food and fuel. The decline in remittances is expected to trigger another wave of depreciation as the country’s foreign currency reserves dwindle.

The UN is requesting $2 billion at the virtual online pledging conference to fund its work in Yemen until the end of 2020. Without securing funding, vital aid programs could be closed down within weeks. Oxfam is urging donors to continue to fund life- saving aid and critical work to respond to coronavirus.