In a report by a UN Agency urged countries to remove restrictions and costly fees on remittances imposed on the $40bn that the migrant workers of Africa send home each year. The report prepared by International Fund for Agricultural Development (IFAD) will be presented at the two-day Global Forum on Remittances 2009 in Tunis, Tunisia, organized by IFAD and the African Development Bank (AfDB).
The report titled “Sending Money Home to Africa” stated although transfer costs had considerably declined in Latin America and the Asian countries, sending money to migrant workers’ loved ones in Africa is still expensive, with fees as high as 25 percent of the total. Furthermore, about 30 to 40 percent of the remittances to Africa have to find way to remote places without collection centres, and the recipients have to travel great distances to collect their cash as the number of collection points across the entire continent is the same as for Mexico, which has a tenth of the population.
The Assistant President of IFAD, Kevin Cleaver said that supporting this people-to-people money flow to rural areas of Africa was especially vital now because of the global recession. He added in the UN press release that the best way to utilize the power of remittances was by easing restrictions and making it less costly for the African families to collect them.
The findings of the report said the global remittances top $300bn per year, outstripping foreign direct investment (FDI) and development assistance combined, but high fees and logistical difficulties are hampering the power of remittances to lift people out of poverty. The G8 group of industrialized countries summit in July has acknowledged the development impact of remittance flows, and has set a target of reducing the cost of remittances by 50 percent over the next five years, to promote a competitive environment by removing existing barriers.
Toboc Trade News