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Africa Needs More English Remittance Men

Barriers on cash sent home to Africa are retarding growth from 'trade not aid'
A study commissioned by the Rome-based International Fund for Agricultural Development shows more than 30 million individuals living outside their countries of origin contribute more than $40bn (£25bn) annually in remittances to their families and communities back home.
Migrants' remittance behaviour is essentially dictated by the regulatory environment and the speed, cost, security, and accessibility of services offered by banks, transfer companies, micro-finance institutions, and informal operators. There are three different strategies in place in Africa.
The Anglophone strategy focuses on freeing up the remittance market by encouraging competition, relaxing regulatory constraints for non-bank operators, offering financial incentives, encouraging technical and financial innovation, and stimulating collaboration among market players. This approach contributes to reducing costs and increasing the overall volume of funds for beneficiaries.
The Hispanic approach emphasises migrants' involvement in banking by offering a range of banking services in both the country of origin and the host country, products of specific interest to migrants, and low commissions on foreign transfers.
Finally, the Francophone approach relies on two types of monopoly. The first is enjoyed by Western Union, which controls up to 90 per cent of the total formal transfer volume within Africa's 16-member Franc Zone. Western Union charges fees as high as 25 per cent on transfers to these countries, compared to an average global benchmark of 5 per cent, and has required that Franc-Zone countries sign exclusivity agreements.
The second monopoly is exercised in the banking sector. France has a veto within the boards of directors of the Franc Zone's two central banks, while two French commercial banks, BNP-Paribas and Société Générale, exercise a quasi-monopoly on lending programs, mainly centred on short-term trade financing and the needs of governments, public and private companies, and the elite.

What would the world do without France to help it? Prosper?
I think we can guess which model the EU is pushing on Africa and it won't be the free market Anglo model...


Africa Needs More English Remittance Men

Well, I've been saying that for a long time :-) But turning to the article in question I think the authors have missed a crucial fourth strategy - The African One.

Regardless of which official system is in place, if it costs them money or allows the authorities to see what's going on you can bet our African chums will find an easier, cheaper, safer way of getting their cash home. A case in point is the system used by many Zimbobwean expats here in SA. Sensibly they don't trust the official systems because, even though the Rand has replaced the Zim Dollar as the official currency, they know Uncle Bob keeps tabs on all money flowing into and out of the country via the banks. Instead they use informal couriers ranging from freinds to bus drivers to transport operators; indeed anyone they know and trust who's travelling back over the Limpopo.

I expressed my surprise when a Zimbo colleague explained this to me but he assured me it was very cheap, often relying on a promise of reciprocal assistance at a leter date rather than fees. Apparently it's also a lot safer than one might imagine, using, as it does, the age old principle of "lose my money, lose your life" as the guarantor of last resort.

And since anyone who crosses the Zim border with any regularity has become an adept smuggler, everyone's happy to know the chances of the Zim authorities ever getting their sticky little fingers on the dosh are non-existent.

nKosi 'sikilele Africa!

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