Remittances grew by 12% in 2010
Apr 14, 2011
REMITTANCES from Ugandans in the diaspora grew by 11.3% to $ 773m (about 1.8 trillion) in 2010, the World Bank’s report indicates. The report observed that the remittance helped reduce poverty at community level.
By Samuel Sanya
REMITTANCES from Ugandans in the diaspora grew by 11.3% to $ 773m (about 1.8 trillion) in 2010, the World Bank’s report indicates. The report observed that the remittance helped reduce poverty at community level.
It said total remittances to Africa stood at $40b for the same period.
“Remittances lead to increased investments in health, education and housing in Africa. Diasporas also provide capital, trade, knowledge and technology transfers,†reads the report.
The report notes that remittances can contribute to better health outcomes by enabling households to purchase more food and healthcare services.
The report shows that of Uganda’s population of 33 million, only 0.4 of the households completed secondary education without remittances, compared to 0.8 and 1.2 who received remittances from within Africa and outside Africa.
The report points out that education (20.2%), health (24.8%) and food (12.4%) were the biggest uses of remittance monies in Uganda.
In east and central Africa, Uganda lags behind Sudan ($3,178m) and Kenya ($1,758m) in remittances, according to the report.
The report partly attributes the growth in remittances to the increased use of mobile money transfer technology, especially Safaricom’s M-pesa in Kenya.
Dilip Ratha, the main author of the report, urged governments in sub-Saharan Africa to issue diaspora bonds as this could raise between $5b to $10b for the continent.
“These bonds have already been successfully used to tap into assets of Israeli and Indians living abroad,†he said.
The report commends post offices, savings and credit cooperatives, rural banks and microfinance institutions for delivering the remittances.
However, it notes that the cost of remitting money to Africa, which is between 5% to 15% of the money value sent, was still expensive, forcing migrants to use informal channels.
The official remittance figures, according to the report, were significantly underestimated, with only about half of the countries in sub-Saharan Africa collecting and reporting remittance data with any regularity.
REMITTANCES from Ugandans in the diaspora grew by 11.3% to $ 773m (about 1.8 trillion) in 2010, the World Bank’s report indicates. The report observed that the remittance helped reduce poverty at community level.
It said total remittances to Africa stood at $40b for the same period.
“Remittances lead to increased investments in health, education and housing in Africa. Diasporas also provide capital, trade, knowledge and technology transfers,†reads the report.
The report notes that remittances can contribute to better health outcomes by enabling households to purchase more food and healthcare services.
The report shows that of Uganda’s population of 33 million, only 0.4 of the households completed secondary education without remittances, compared to 0.8 and 1.2 who received remittances from within Africa and outside Africa.
The report points out that education (20.2%), health (24.8%) and food (12.4%) were the biggest uses of remittance monies in Uganda.
In east and central Africa, Uganda lags behind Sudan ($3,178m) and Kenya ($1,758m) in remittances, according to the report.
The report partly attributes the growth in remittances to the increased use of mobile money transfer technology, especially Safaricom’s M-pesa in Kenya.
Dilip Ratha, the main author of the report, urged governments in sub-Saharan Africa to issue diaspora bonds as this could raise between $5b to $10b for the continent.
“These bonds have already been successfully used to tap into assets of Israeli and Indians living abroad,†he said.
The report commends post offices, savings and credit cooperatives, rural banks and microfinance institutions for delivering the remittances.
However, it notes that the cost of remitting money to Africa, which is between 5% to 15% of the money value sent, was still expensive, forcing migrants to use informal channels.
The official remittance figures, according to the report, were significantly underestimated, with only about half of the countries in sub-Saharan Africa collecting and reporting remittance data with any regularity.