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Remittances in Africa - Challenges and Opportunities


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Presentation by Dr. Peter Hansen (DIIS) at the 8th Brussels Development Briefing - Brussels, 11 December 2008 -

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Remittances in Africa - Challenges and Opportunities

  1. 1. Remittances to Africa Challenges and Opportunities Dr. Peter Hansen Anthropologist Migration Unit, DIIS
  2. 2. Migration and remittances in Africa <ul><ul><li>Lack of data (migrants & flows) </li></ul></ul><ul><ul><li>North Africa as major recipient </li></ul></ul><ul><ul><li>Migration within Africa </li></ul></ul><ul><ul><li>Urban-rural remittances </li></ul></ul><ul><ul><li>Intraregional remittances </li></ul></ul><ul><ul><li>Informality </li></ul></ul>
  3. 3. Relatively small volume to SSA Source: The World Bank 2008
  4. 4. Top 10 recipients by volume Source: IFAD 2007
  5. 5. Top 10 recipients relative to GDP Source: IFAD 2007
  6. 6. External flows to SSA Source: GDF 2008, OECD-DAC stats
  7. 7. Remittances to fragile states <ul><li>Average 12,8 % of GDP in fragile states </li></ul><ul><li>6,4 % of GDP in non-fragile states </li></ul><ul><li>Lifeline to people in (post)conflict countries </li></ul><ul><li>May also contribute to conflict </li></ul>Sources: IFAD 2007 The World Bank
  8. 8. Challenges for (rural) Africa <ul><li>Migration within the continent </li></ul><ul><ul><li>Rural areas are cut off from international remittances </li></ul></ul><ul><ul><li>Lack of data on remittances to rural areas </li></ul></ul><ul><li>Weak financial system </li></ul><ul><ul><li>Little access to formal banking sector </li></ul></ul><ul><ul><li>Few MTOs and little competition </li></ul></ul><ul><ul><li>High cost and little saving/investment </li></ul></ul>
  9. 9. Opportunities <ul><li>Strengthen the financial sector </li></ul><ul><ul><li>Bank rural areas </li></ul></ul><ul><ul><li>Deregulate remittance markets (increase competition and lower costs) </li></ul></ul><ul><ul><li>Use new technology (e.g. SMS and Internet) </li></ul></ul><ul><ul><li>Informality as an opportunity (e.g. hawala in Somalia, transport sector in Tanzania and Kenya) </li></ul></ul><ul><li>Develop migration/diaspora policies </li></ul><ul><ul><li>Africa in an early phase of migration management </li></ul></ul><ul><ul><li>Economic policies, diaspora accounts, diaspora bonds, co-financed development, etc. </li></ul></ul><ul><ul><li>Curb brain drain </li></ul></ul>
  10. 10. The remittance mantra <ul><li>Remittances as development discourse </li></ul><ul><ul><li>Turns diasporas into instruments for development </li></ul></ul><ul><ul><li>May divert attention from problems to development existing in home country </li></ul></ul><ul><li>Is development the responsibility of diasporas? </li></ul><ul><ul><li>The state still has a role to play </li></ul></ul><ul><ul><li>What can we ask of migrants who often live in hardship and with the burden of sending remittances? </li></ul></ul>