ACCRA, Ghana, February 19, 2019/ — In Sub-Saharan Africa, the flow of remittances is on the rise, but the cost to transfer these funds is far higher than the global average, making the region the most expensive place in the world to send money.
The International Organization for Migration (IOM) and partners focused on improving the use of migrant remittances, particularly in Sub-Saharan Africa at a three-day regional thematic meeting starting today (19/02) in Accra, Ghana.
International remittances have been taking on increasing weight in the global policy agenda in recent years according to Jeffrey Labovitz, IOM Regional Director for East and Horn of Africa, who is speaking at the event.
“This in part reflects the growing understanding that improving and harnessing the flow of remittances can have a substantial impact on development,” he said.
Remittances to Sub-Saharan Africa grew from USD 34 billion in 2016 to USD 38 billion in 2017, an increase of over 11 per cent. Despite this increase – a trend which is expected to continue through 2019 – Sub-Saharan Africa remains the most expensive place in the world to send money with an average cost of 9.4 per cent of the transfer amount, a figure that was 29 per cent above the world average in 2017. This is far short of the Sustainable Development Goals (SDG) target 10.C.3 to reduce the transaction costs of migrant remittances to less than 3 per cent by 2030.
“Almost 75 per cent of remittances are spent on consumption which greatly benefit the receiving households and communities,” said Claudia Natali, Regional Specialist on Labour Mobility and Development at the IOM Regional Office for West and Central Africa.
“But more could be done to maximize the remaining 25 per cent. Fostering financial inclusion and promoting initiatives that help people manage the funds can go a long way to harness development impacts of remittances,” she added.
The meeting, which runs through Thursday (21/02), is providing a platform for communication, exchange and learning for 80 participants involved in IOM’s “ACP-EU Migration Action", including migration experts and representatives from African, Caribbean and Pacific (ACP) governments, regional organizations, the European Union (EU), UN agencies and NGOs working in remittances and diaspora mobilization.
Given that remittances are at the heart of the joint ACP Group of States and European Union Dialogue’s recommendations on migration, discussions also aim to generate thematic recommendations for the Sub-Saharan region and establish links between the outcomes of the ACP-EU Migration Action programme, and processes relevant to the ACP-EU Dialogue on Migration and Development at the regional and global levels.
The meeting is organized by IOM’s country office for Ghana and the IOM Regional Office in Brussels in partnership with the African Institute for Remittances (AIR) and Making Finance Work for Africa Partnership (MFW4A).
IOM’s ACP-EU Migration Action, launched in June 2014, provides tailored technical support on migration to ACP countries and regional organizations. To date it has received 74 technical assistance requests from 67 ACP governments and 7 regional organizations, a third of which directly concern remittances.
The programme is financed by the 10th European Development Fund (EDF) and supported by the ACP Secretariat and the EU.