The World Bank has said the flow of remittances to Sub-Saharan Africa is expected to reach $21.5 billion (Shs47.4 trillion) this year after a dismal 2009 reduction due to the global financial crisis. This was revealed through ‘Migration and Remittances Factbook 2011, a WB publication that tracks documented private transfers of funds and migratory patterns around the world.
The book shows that Africa-bound flows fell by about 4 per cent between 2008 and 2009, marking the first decrease since 1995. “We estimate that recovery will continue over the next two years, with remittance flows to the continent possibly reaching about $24 billion by 2012,” said Dilip Ratha, manager of the migration and remittances unit at the World Bank.
Ratha cautions that these numbers are gross underestimates, because millions of Africans rely on informal channels to send money home. Worldwide, remittance flows are expected to reach $440 billion by end-2010, up from $416 billion in 2009.
About three-quarters of these funds, or $325 billion, will go to developing countries. The World Bank estimates that flows to developing countries as a whole will rise further over the next two years, possibly exceeding $370 billion by 2012.
Remittances to Uganda will reach an estimated $773 million in 2010, up from $694 million the previous year. “Remittances are a critical lifeline for families and entire communities across Africa, especially in the aftermath of the global crisis,” Ratha said. “The fact that remittances are so large, come in foreign currency, and goes directly to households, means that these transfers have a significant impact on poverty reduction, funding for housing and education, basic essential needs, and even business investments.”
Expensive sending costs
There is a pressing need to make it easier and cheaper to send and receive remittances in Africa. The average cost of sending money to Africa is more than 10 per cent, the highest among all regions. The cost of sending money within Africa is even higher.
The publication said in absolute dollars, Nigeria is by far the top remittance recipient in Africa, accounting for $10 billion in 2010, a slight increase over the previous year ($9.6 billion).
Other top recipients include Sudan ($3.2 billion), Kenya ($1.8 billion), Senegal ($1.2 billion), South Africa ($1.0 billion), Uganda ($0.8 billion), Lesotho ($0.5 billion), Ethiopia ($387 million), Mali ($385 million), and Togo ($302 million).
As a share of Gross Domestic Product, the top recipients in 2009 were: Lesotho (25 percent), Togo (10 per cent), Cape Verde (9 per cent), Guinea-Bissau (9 per cent), Senegal (9 per cent), Gambia (8 per cent), Liberia (6 per cent), Sudan (6 per cent), Nigeria (6 per cent), and Kenya (5 per cent).
22 million migrants
The book estimates that nearly 22 million Sub-Saharan Africans have left the continent. Africa also has a higher intra-regional migration rate than the rest of the developing world, with three out of four African migrants living in another country in Sub-Saharan Africa. In general, islands and fragile or conflict-afflicted states have the highest rates of skilled emigrants.