Sri Lanka’s ambitious target of US $1 billion monthly foreign inflow from worker remittance by end-2023 is set to become reality amidst signs of sending more money by expatriates via banking channels.
This target could be achieved with more people leaving the country for offshore jobs after an unprecedented economic crisis, Foreign Employment and Labour Minister Manusha Nanayakkara said.
Worker’s remittances have fallen 40.2 percent to $2.9 billion in the first 10 months of this year mainly as most Sri Lankan expatriate workers sought informal methods like Undiyal or Hawala to send the money due to higher exchange rate than that offered by the formal banking system in Sri Lanka.
Nanayakkara has introduced several incentives to encourage Sri Lankan workers in foreign countries to send their money through the formal system and the island nation has witnessed a reversal in year-on-year fall in monthly remittances for the first time in September 16 months.
In a sign of increasing foreign exchange inflows in the New Year workers’ remittances had peaked to a new high of $ 384 million in November but given losses earlier, the year-to-date figure remains down by 36 percent.
The November 2022 figure is the highest since August last year when $ 447 million was achieved. It also reflects an increase in inflows despite a slight drop in October compared to September.
Workers’ remittances in the first 11 months of 2022 were down by 36 percent to $ 3.3 billion. As a result of rebound in inflow, the year-on-year deficit in the first 11 months had been reduced in comparison to 51.6 percent in the first half of 2022 and 44 percent in the first nine months.
Labour Minister Manusha Nanayakkara recently revealed that a record 300,000 people had migrated for overseas jobs.
Central Bank of Sri Lanka citing data up to October disclosed that total departures for foreign employment during January-October 2022 were recorded at 251,151 which has exceeded the annual departures in pre-pandemic period.
In October, departures for foreign employment were recorded at 28,473 with unskilled being (11,399), skilled (7,887) and domestic aid (6,165).
Sri Lanka recorded a high foreign remittances of $7.4 billion in 2020 and analysts believe the minister’s $1 billion monthly target is “highly ambitious” unless the central bank creates confidence among foreign expatriates on formal banking system.
The government has taken some steps to encourage foreign employees send money via proper banking channels by promising high duty-free allowance, pension benefits, and vehicle imports to boost foreign remittances.
The government has also focused on sending skilled labourers for foreign employment, instead of unskilled, the minister said.
A record 273,988 Sri Lankans have left the country for foreign jobs as of November 14 this year, compared to 203,087 outward labour migrations in 2019.
