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Remittances to 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

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Remittances to Africa Challenges and Opportunities

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  1. Remittances to AfricaChallenges and Opportunities Dr. Peter Hansen Anthropologist Migration Unit, DIIS DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  2. Migration and remittances in Africa • Lack of data (migrants & flows) • North Africa as major recipient • Migration within Africa • Urban-rural remittances • Intraregional remittances • Informality DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  3. Relatively small volume to SSA Source: The World Bank 2008 DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  4. Top 10 recipients by volume Source: IFAD 2007 DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  5. Top 10 recipients relative to GDP Source: IFAD 2007 DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  6. External flows to SSA Source: GDF 2008, OECD-DAC stats DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  7. 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 DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  8. 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 DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  9. 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 DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

  10. 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? DIIS ∙ DANISH INSTITUTE FOR INTERNATIONAL STUDIES

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