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Remittances to Africa Resilient Despite 
Global Financial Crisis _ World Bank Study

Posted by Business in Ghana on November 14, 2010

Ghana-bound flows to rise modestly in 2010

Remittance flows to Sub-Saharan Africa will reach US$21.5 billion this year after a small decrease in 2009 due to the global financial crisis, according to Migration and Remittances Factbook 2011, a World Bank publication that tracks documented private transfers of funds and migratory patterns around the world.

The book shows that Africa-bound flows fell by about four percent 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 US$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 US$440 billion by end-2010, up from US$416 billion in 2009. About three-quarters of these funds, or US$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 US$370 billion by 2012.

Remittances to Ghana will reach an estimated US$119 million in 2010, up from US$114 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 go 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._

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 percent, the highest among all the regions. The cost of sending money within Africa is even higher.

In absolute dollars, Nigeria is by far the top remittance recipient in Africa, accounting for US$10 billion in 2010, a slight increase over the previous year (US$9.6 billion). Other top recipients include Sudan (US$3.2 billion), Kenya (US$1.8 billion), Senegal (US$1.2 billion), South Africa (US$1.0 billion), Uganda (US$0.8 billion), Lesotho (US$0.5 billion), Ethiopia (US$387 million), Mali (US$385 million), and Togo (US$302 million).

As a share of gross domestic product, the top recipients in 2009 were: Lesotho (25 percent), Togo (10 percent), Cape Verde (9 percent), Guinea-Bissau (9 percent), Senegal (9 percent), Gambia (8 percent), Liberia (6 percent), Sudan (6 percent), Nigeria (6 percent), and Kenya (5 percent).

Migration Trends

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. Nationals who attended university and left their country the most are from Cape Verde (68 percent), Gambia (63 percent), Mauritius (56 percent), Seychelles (56 percent), Sierra Leone (53 percent), Ghana (47 percent), Mozambique (45 percent), Liberia (45 percent), Kenya (38 percent), and Uganda (36 percent).

Africa’s most dynamic migration corridors are Burkina Faso_Côte d_Ivoire (1.3 million migrants), Zimbabwe_South Africa (0.9 million), and Côte d_Ivoire_Burkina Faso (0.8 million). Others include Uganda_Kenya, Eritrea_Sudan, Mozambique_South Africa, Mali_Côte d_Ivoire, the Democratic Republic of Congo_Rwanda, Lesotho_South Africa, and Eritrea_Ethiopia.

Nearly 825,000 Ghanaians are living outside Ghana in 2010. Among the tertiary-educated population, 47 percent are living outside Ghana as of 2000 and over 37 percent of physicians trained in Ghana live outside the country. The top destination countries for emigration from Ghana are Nigeria, Côte d_Ivoire, the United States, the United Kingdom, Burkina Faso, Italy, Togo, Germany, Canada, and Liberia. It is estimated that more than 1.85 million non-Ghanaians are living in Ghana in 2010, nearly 42 percent of whom are women.

Migration and Remittances Factbook 2011 is the second edition of an initial volume issued in 2008. The Factbook relies on data publicly available from reliable sources. As a result, data on some important migration corridors_for example, from Zimbabwe to South Africa, are not adequately covered in the book.

 

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