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Ghanaians abroad send over $2b home as remittances to Africa reach $40b record high

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RemittancesGhanaians living abroad have sent remittances or private unrequited transfers (net) in the year 2010 to the tune of $2.12 billion, the World Bank Ghana Country office has told ghanabusinessnews.com in an email response to enquiries.

Meanwhile, a World Bank report says Africa recorded high inflows of remittances to the tune of $40 billion from African migrants living outside their respective countries in 2010. And the Bank says it is the continent’s largest source of net foreign inflows after foreign direct investment (FDI).

Remittances are moneys sent by nationals living outside their country back home to their households in their country.

The report says the inflow of the remittances to the continent has quadrupled between 1990 and 2010. This is equivalent to 2.6% of Africa’s gross domestic product (GDP) in 2009 more than the 1.9% average for all developing countries, it adds.

“Officially recorded remittance flows to Africa are estimated to have reached $40 billion in 2010 (divided roughly equally between North Africa and Sub-Saharan Africa), almost twice the amount received in 2005 and more than four times the $9.1 billion received in 1990 and equivalent to 2.6 percent of Africa’s gross domestic product (GDP) in 2009”, the Bank says in a report titled “Leveraging Migration for Africa: Remittances, Skills, and Investments” which was released on March 30, 2011.

Although part of the recorded growth of remittances reflects improvements in measurement, the report indicates that the main reasons for the extraordinary level of growth are the increase in “emigration from Africa and the rising incomes of African migrants, on the back of a booming global economy before the financial crisis in 2008 to 2010.”

Nigeria had the substantial share of the remittances to sub-Saharan Africa with an amount of $10 billion remitted for the year 2010 and Lesotho was the largest recipient in terms of GDP with 28.5%.

“Nigeria’s $10 billion equaled about half of all officially recorded remittances to Sub-Saharan Africa in 2010,” the report says.

Egypt and Morocco were the two largest recipients in North Africa in terms of absolute flows and share of GDP, and account for three-quarters of flows to North Africa, followed by Algeria and Tunisia, it says.

According to the report, recorded remittance flows to Africa are similar in size to official aid flows.

“They are several times larger than official aid to North Africa (3.3% of GDP versus 0.6% of GDP) and two-thirds the size of official aid flows to Sub-Saharan Africa (2.2% of GDP versus 3.7% of GDP).”

The report said in “many low-income African countries, remittances exceed private investment flows and represent a lifeline to the poor.”

The report which was prepared both by the World Bank and the African Development Bank (AfDB) with the help of other international partners was based on International Monetary Fund’s (IMF) balance of payments statistics which according to the report are likely well below the actual volume of remittance flows to Africa.

“The remittance inflows data reported by country authorities themselves are often higher than the IMF figures”, the report indicated.

It cited Ghana as an example saying “Ghana’s central bank reported $1.6 billion in remittance inflows in 2009 – more than 10 times the $114 million reported in the IMF balance of payments statistics.”

By Emmanuel K. Dogbevi & Ekow Quandzie

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