allAfrica.com: Africa: Sending Money Home (Page 1 of 4)

"Remittance flows to and within Africa approach US$40 billion.

North African countries such as Morocco and Egypt are the continent's major recipients. East African countries heavily depend on these flows, with Somalia standing out as particularly remittance dependent. For the entire region, these transfers are 13 per cent of per capita income." - Sending Money Home, International Fund for Agricultural Development.

In recent years the economic importance of remittances for developing countries has attracted increasing attention. But, with the exception of Latin America and the Caribbean, empirical research has been scanty. "Sending Money Home" is the first report to try to estimate remittance flows from migrants from every continent, concluding that in 2006 some 150 million migrants sent more than $300 billion to their home countries.

This AfricaFocus Bulletin contains excerpts from that report, which is also available on-line at http://www.ifad.org/events/remittances/maps, as well as a recent Foreign Policy in Focus commentary by Francis Calpotura of the Transnational Institute for Grassroots Research and Action (TIGRA, http://www.transnationalaction.org). The Oakland, California-based group focuses on organizing migrants to increase the impact of their remittances, including lobbying for better terms with money transfer companies. Working primarily with Mexican hometown associations in the United States, TIGRA has organized surveys among migrants, organizing them into "Million Dollar Clubs" of immigrant communities and groups estimated to be sending at least one million a year home to their communities.

Member organizations are principally from Latin America, but also include African immigrant groups such as the Somali Action Alliance in Minneapolis. They are currently organizing a campaign for Western Union to sign a "Transnational Community Benefits Agreement."

For earlier references to research on remittances and development, see the listing inhttp://www.eldis.org, available at http://tinyurl.com/yvyoyf, and the listing from http://www.livelihoods.org, at http://tinyurl.com/yvrt89

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Sending Money Home: Worldwide Remittance Flows to Developing Countries

International Fund for Agricultural Development

This report has been elaborated based on a study commissioned by IFAD to the Inter-American Dialogue in collaboration with the Multilateral Investment Fund of the IDB and contributions from the European Union, Government of Spain, Government of Luxembourg, CGAP and UNCDF.

[Excerpts only. For full report, including summary data for 51 African countries, see http://www.ifad.org/events/remittances/maps

For more information, please contact: Pedro de Vasconcelos, Remittances Programme Coordinator, IFAD (remittances@ifad.org)]

Remittances, the portion of migrant workers' earnings sent back home to their families, have been a critical means of financial support for generations. But, for the most part, these flows have historically been "hidden in plain view", often uncounted and even ignored. All that is now changing - as the scale of migration increases, the corresponding growth in remittances is gaining widespread attention.

Today, the impact of remittances is recognized in all developing regions of the world, constituting an important flow of foreign currency to most countries and directly reaching millions of households, totaling approximately 10 per cent of the world's population. The importance of remittances to poverty alleviation is obvious, but the potential multiplier effect on economic growth and investment is also significant.

The driving force behind this phenomenon is an estimated 150 million migrants worldwide who sent more than US$300 billion to their families in developing countries during 2006, typically US$100, US$200 or US$300 at a time, through more than 1.5 billion separate financial transactions. These funds are used primarily to meet immediate family needs (consumption) but a significant portion is also available for savings, credit mobilization and other forms of investment. In other words, the world's largest poverty alleviation programme could also become an effective grass roots economic development programme, particularly in the rural areas that present some of the greatest challenges to financial inclusion.

Three aspects could further enhance this development:

Improvements in data collection, Reduction in transaction costs, and Increased efforts to leverage remittance flows for greater development impact.

Africa

Migration

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