Sub-Saharan Africa received almost $12 billion in remittances in 2007, and that was only the official number. With "informal" flows added the total amount can easily be double that number. Nigeria, Kenya, Sudan, Senegal, Uganda and South Africa received the highest volume of remittances, while in smaller countries such as Lesotho remittances represent up to a quarter of GDP.
Remittance costs are significantly higher for Africa compared to other regions; costs can go up to almost 25% of the amount remitted. Remittances between African countries (from South Africa, for example) are especially expensive. Reducing these costs will mean substantial extra transfers, and this will be a focus of the World Bank’s medium term agenda on the African financial sector. The immediate concern is, however, stability of flows: the recent international credit crisis will lead to a slowdown in remittances. Remittances have generally been counter-cyclical in the past, as they tend to increase when the receiving country experiences adverse events.
But a recession in sending countries could hurt the capacity of migrants to send money home. It is still too early to determine if the latter factor will dominate and cause a decline in the total amount remitted, although there are some disturbing signs. High-frequency data on remittances for African countries are scarce, but available data show that remittances from the US seem to have slowed down in recent months; remittances from other sending countries, however, have not yet been affected.
Since some readers of this blog are senders of remittances, and others recipients, it would be helpful to hear how you see remittances changing in the current situation.
Comments
How will the financial crisis affect remittances to Africa?
Effect of Financial Crises
How will financial crisis affect remittances to Africa?
How financial crisis will affect remittances to Africa
People remit money out of: sheer personal sacrifices and disposable incomes available to them. With high inflation and soaring bills mounting in countries like the UK, it is becoming a challenge to make remittances amid looming fuel poverty. Whats more, the reality is that by next year, there would obviously be significant reduction in remittance flow to developing countries.
However, for some ingenious people, there is a new dimension of remittances from developing countries to developed countries, as it appears access to 'quick cash' is rampant. Could we have some contributions on remittances from Africa to developed countries. Perhaps, with the current predictions and warnings from professionals and policy makers and analyst, it appears the economic recession has just begun.
Remittance from Africa to Developed countries
Observations
effect of the financial crisis on remittances
Western Union taking advantage of the crisis?
The crisis is going to hit Very Hard!
Countries that have opened
financial crisis
Hi does anyone know where I
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