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African countries eye money transfer mechanism for development
News Date: 27th November 2009
Participants in an African conference on money transfer held in the Cameroonian capital Yaounde from Monday to Friday are calling for the organization of the operation to make it more productive to the continent's development.
According to a Cameroonian, Simon Awanchiri, the operations of sending money by African migrants to their countries of origin have risen from 4 billion U. S. dollars to 40 billion dollars between 2003 and 2008.
"This is a very important phenomenon that African governments need to critically examine. Some other continents have used it for their own
development. We should not just stay at the level of consumption. This money should also help us to create wealth," declared Raymond Asombang, a micro finance promoter in Cameroon.
He said the people who receive the money should be sensitized so that they can spend it rationally. "If, for example, your son sends you 100,000 FCFA (200 dollars), instead of straight away going to spend it on alcohol, you can keep it in the bank for one or two months and it can earn you some interest," he recommended.
Yero Balde, a Senegalese economics doctorate student at Limoges University in France, proposed that governments take note of these money transfers in order to increase the stakes for national development.
"Very recently, this theme was a subject of international discussion, but all that was only focusing on Southeast Asia, the Pacific, Latin America and the Caribbean, as well as the Middle- East," he said, noting sub-Saharan Africa, his field of study, was conspicuously absent.
Recent studies have shown that the money being returned helped to meet the needs of the migrant's family, which includes school fees for the younger brother or younger sister, or better still, health care for the mother or the father.
On several occasions, the money has been used to put up big housing units, bringing changes in many big towns in countries like Cameroon, which recorded a growth of 140 billion FCFA (280 million dollars) in 2006.
"All the figures that we are counting concern the money that is always transported through the formal channels. Now, we understand that there's so much money that enters the country's borders without being counted. There
are numerous informal channels," Awanchiri observed.
In the formal circuits, the journey of the money flowing in is not easy, partly due to the taxes to pay which are sometimes discouraging.
"In the town where I live, Limoges, there is only one company that sends money back into Africa, Western Union. Therefore there's no
competition. We are forced to pay very high costs," Balde said.
In a report titled "Sending Money Home to Africa", the International Fund for Agricultural Development noted that these costs of commissions, which are reducing in Asia and Latin America, have a tendency to increase in
Africa, where a share of 25 percent is recorded for the transferred amount.
During the July summit in Aquila in Italy, the G8 leaders committed themselves to reducing these costs by 50 percent in the next five years.
A doctorate student in mathematical economics at the University of Yaounde ll, Eric Patrick Feubi Pamen, recommended that there should be cooperation between the migrants' host countries, their countries of origin
and the international organizations in decision making in view of exempting these financial transactions from taxes.
"This will make the migrants send more money to their countries of origin, and through these funds, we can develop micro-projects to create employment directly or indirectly, and this will reduce poverty at family level," he said.
He pointed out that the common people, farmers' groups and the decentralized communities are just transmission belts between the diaspora and the homeland to better develop these micro-projects.
Countries like Senegal and Mali have better experience in this field.
Both have created a ministry of Diaspora to allow for channelling funds from expatriates to national development.
The Yaounde meeting brought together participants from Cameroon, South Africa, Gabon, Ghana, Kenya, Nigeria, France and Switzerland.
Source: GNA
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