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

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

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

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

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

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

7. DIIS DANISH INSTITUTE FOR INTERNATIONAL STUDIES 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

8. DIIS DANISH INSTITUTE FOR INTERNATIONAL STUDIES 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

9. DIIS DANISH INSTITUTE FOR INTERNATIONAL STUDIES 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

10. DIIS DANISH INSTITUTE FOR INTERNATIONAL STUDIES 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?