Walking through the once bustling streets of Diepsloot, you only notice shuttered shops now. Many of these shops were run by migrants, the kind that brought much needed employment and economic activity to the streets of Johannesburg, but also were key in supporting the development of their home countries through remittances. Estimates from available data indicate that there could feasibly be up to four million migrants living in South Africa, 70 percent of whom are from the SADC region.
The majority of these are economic migrants, who came to South Africa in search of work and economic opportunities. As many as 2.9 million hold no legal right to work in South Africa suggesting that, for many, their primary sources of income may be derived in the informal sector or under informal employment conditions. The adverse impact of the lockdowns was perhaps most pronounced on the informal sector, which was estimated to employ approximately 2.5 million workers and business owners in 2018 . The South African Government has provided relief support for citizens, however limited support has been provided for economic migrants who send much needed money home to support family members.
What happened to these people?
In a recent article, the Mail and Guardian chronicles a series of interviews with migrants who have been adversely impacted by the lockdowns in South Africa. One of the migrants highlights that he and his friends have adopted a 101 or 011 formula to determine when they can eat. For example, A “101” means you skip a meal in the afternoon; “011” means you skip a meal in the morning, and then you need to find what to eat in the afternoon and in the evening. Several other migrants confirm that the income they’ve been able to generate has not been sufficient to meet their own basic needs let alone having a surplus to remit to loved ones.
With South Africa having one of the strictest lockdowns, globally and in Africa, there have been limitations on movement as well as restrictions on the business activities and services that were categorised as non-essential. We estimate that R21.87 billion was remitted from South Africa to the rest of SADC by migrants in 2018 alone. SARB data shows that volumes of cross border remittances (SA to the rest of SADC) dropped from R763.5 million in March 2020 to R390.8 million in April 2020. Although volumes are on a steady incline to pre-lockdown levels detailed analysis from ADLAs continue to report that a sizeable percentage of customers (SADC migrants) that had sent low values (tracking from January 2019) of under R1 000 have stopped remitting since March 2020. One of the ADLAs have confirmed that 60 000 customers who had remitted R1000 or less had completely stopped remitting since March 2020. This confirms a pattern of those most vulnerable being unable to send money home.
It is not hard to imagine the dire circumstances migrants have experienced since the beginning of the lockdowns, moreover the those experienced by loved ones’ back home who have, in most cases, lost their primary sources of income.
What is being done about it?
In line with our commitment to positively impact the lives of the most vulnerable within the SADC Region, FinMark Trust has set up an Income Support Fund for SADC Migrant Families in an effort to provide short term relief to migrants. Customer and supply side data is being used to assess those most vulnerable, with support from the South African Reverse Bank (SARB) and local Authorised Dealers with Limited Authority (ADLAs).
The initial round of disbursements from the Income Support Fund will provide support to 5 242 beneficiaries in Zimbabwe, Malawi, Mozambique, Eswatini and Lesotho, on a monthly basis for a three-month period.
The selection of beneficiaries is based on a bespoke vulnerability assessment of senders (in South Africa) and beneficiaries in the recipient countries. Women, those residing rural areas and those who have completely stopped sending low value remittances since the onset of the lockdowns, will be prioritised to benefit from this Income Support.
We are proud to partner with Hello Paisa and Mukuru who have been instrumental in facilitating formal cross border remittances in the SADC region and beyond. And, we are grateful to the FCDO for the generous donations that will impact the lives of many vulnerable households within the SADC region. The Income Support Fund remains open to receive further donations for the benefit of the most vulnerable households within the SADC region.
At FinMark Trust, we know this won’t be enough for everyone, but for some women residing in rural areas in the recipient countries, their children need not go to bed on an empty stomach.
FinMark Trust Welcomes £300 000 from the Foreign, Commonwealth and Development Office (FCDO) towards its Income Support Fund for SADC Migrant Families.