Remittances in Africa - Challenges and Opportunities

Remittances to Africa Challenges and Opportunities Dr. Peter Hansen Anthropologist Migration Unit, DIIS

Migration and remittances in Africa
Lack of data (migrants & flows)
North Africa as major recipient
Migration within Africa
Urban-rural remittances
Intraregional remittances
Informality

Relatively small volume to SSA Source: The World Bank 2008

Top 10 recipients by volume Source: IFAD 2007

Top 10 recipients relative to GDP Source: IFAD 2007

External flows to SSA Source: GDF 2008, OECD-DAC stats

Remittances to fragile states
Average 12,8 % of GDP in fragile states
6,4 % of GDP in non-fragile states
Lifeline to people in (post)conflict countries
May also contribute to conflict
Sources: IFAD 2007 The World Bank

Challenges for (rural) Africa
Migration within the continent
Rural areas are cut off from international remittances
Lack of data on remittances to rural areas
Weak financial system
Little access to formal banking sector
Few MTOs and little competition
High cost and little saving/investment

Opportunities
Strengthen the financial sector
Bank rural areas
Deregulate remittance markets (increase competition and lower costs)
Use new technology (e.g. SMS and Internet)
Informality as an opportunity (e.g. hawala in Somalia, transport sector in Tanzania and Kenya)
Develop migration/diaspora policies
Africa in an early phase of migration management
Economic policies, diaspora accounts, diaspora bonds, co-financed development, etc.
Curb brain drain

The remittance mantra
Remittances as development discourse
Turns diasporas into instruments for development
May divert attention from problems to development existing in home country
Is development the responsibility of diasporas?
The state still has a role to play
What can we ask of migrants who often live in hardship and with the burden of sending remittances?

Remittances in Africa - Challenges and Opportunities

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