Remittance inflows $10m last year, says Unctad report

Remittances from Tanzanians in the diaspora amounted to Sh16 billion ($10.2 million) last year, a report has indicated.

Released by the United Nations Conference on Trade and Development (Unctad) yesterday, the ‘Least Developed Countries report’ noted that $4.5 million of the remittances came from the UK, $3.2 million from Canada and $2.5 million from Kenya.

Last year the Bank of Tanzania reported that Tanzanians in the diaspora remitted Sh534 billion ($356 million) between July 2005 and September 2007.

According to Unctad, remittances to Least Developed Countries (LDCs) in 2011 were almost twice foreign direct investment (FDI) inflows ($15 billion) to such countries.

Remittances are much more important for LDCs than for other country groups. In LDCs, remittances account for 4.4 per cent of the gross domestic product and 15 per cent of exports. 

“These shares are three times higher than in other developing countries [non-LDCs],” says the Unctad.

Among the East African countries whose remittances exceeded receipts of FDI in 2008–2010 were Burundi and Uganda. The report estimates that about 2 million university-educated persons from LDCs live and work abroad. 

In developed countries, 35 per cent of immigrants have university education while in LDCs, just 4 per cent of immigrants have the same level of education

“One third of LDC university-educated emigrants live in just one country: the United States,” says the report.

A World Bank brief says remittances to the developing world are expected to exceed earlier estimates to $406 billion this year, an increase of 6.5 per cent over the previous year.

Remittances to developing countries are projected to grow by 7.9 per cent in 2013, 10.1 per cent in 2014 and 10.7 per cent in 2015 to reach $534 billion in 2015.

“However, despite the growth in remittance flows to developing countries, the continuing global economic crisis is dampening remittance flows to some regions, with Europe and Central Asia and Sub-Saharan Africa especially affected, while South Asia and the Middle East and North Africa are expected to fare much better than previously projected,” says the brief.

Another obstacle to the growth in remittance flows is the high cost of sending money, which averaged 7.5 per cent in the third quarter of 2012 for top 20 bilateral remittance corridors and 9 per cent for all countries for which cost data are available. 

The average remittance cost for Sub-Saharan Africa was 12.4 per cent — the highest in developing regions.
Source: The Citizen, , reported by Veneranda Sumila in Dar es Salaam

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