Remittance vital for economy of whole continent
(ANSAmed) – RABAT, MARCH 6 – One of the most important contributing factors to the economies of many African countries are remittances from citizens living abroad. The crucial influx of money often becomes a real resource for economies that, whether stagnant or growing, are able to draw enormous benefits from the phenomenon, even though the costs involved are considered too high. To illustrate the importance of money transfers, in Morocco alone around 7 billion euros enter the kingdom every year.
After foreign direct investments, money transfers from migrants are the second largest source of income for the African continent. The cost of these operations, though, reach 15% of the amount of money transferred, according to a report produced jointly by the African Development Bank (BAD) and France, which says that the importance of the source of income should bring about a lowering of costs. “These flows of private money support growth in developing countries, in the same way as development cooperation and foreign direct investments. They help to strengthen the capacity for saving and investment in benefiting countries”.
Considering that “when Europe loses one percentage point of its rate of growth, Africa loses 0.5%”, the report states that sources of growth should be found, particularly through a greater reorganisation of the funds transferred by migrants to their families.
The study also highlights the need to diversify intermediaries. The BAD says that money transfer companies should not be the only ones involved in the transactions, but that banks and other specialised e-banking groups should also play a role, as the increase in competition would ensure a lowering of costs.
Driss Farès, the secretary general of the Union of North African Banks, says that transfers account for 7 billion dollars a year in Morocco. “We must show that this is a defiscalised saving, drawn from rich economies”. Farès says that the figure is actually higher, as statistics are thought not to take into consideration transfers made by French nationals of Moroccan extraction, as they are not considered migrants. There are also problems in establishing transfers from Germany, where dual nationality is forbidden.
In light of the study by the BAD and France, the BAD’s representative in Morocco, Amani Abou-Zeid, has announced in an interview with Le Soir- Echos, that a “migrant transfer fund” is to be set up, with the aim of “supporting local initiatives”. Abou-Zeid said that she was proud that three of the proposals considered had been made by Morocco, which she called a “pioneer thanks to association that have existed for some time” and that “have done formidable work to develop their communities in a responsible and integrated way”. The BAD’s role is therefore “to orientate and to guide, and if financing is needed, the bank will intervene through the fund recently created”. (ANSAmed).
