Migrant labor remittances in Africa: reducing obstacles to developmental contributions

This paper presents a preliminary analysis of migrant remittances in Africa based on a review of widely dispersed data and documentation. Its purpose is to stimulate and inform discussions of the role remittances play in African economies and to help stakeholders design appropriate policy interventions. By exploring the actual and potential links between remittances and development, it identifies obstacles that limit the potential for greater contributions.

Findings include:

• throughout Africa, financial and monetary policies and regulations have created barriers to the flow of remittances and their effective investment
• a few governments have facilitated foreign exchange transactions or provided investment incentives such as matching grants, but more could be done, especially in the context of the regulation of the financial industry
• restrictive licensing of money transfer services, for example, limits access to remittances and restricts the potential impact of remittances in many areas
• other regulations and policies create unattractive environments for investment and block improvements in financial services
• removing those obstacles—and broadening and adapting relevant financial products and services, such as savings and investment options—would boost remittance flows and raise their impact on development

[adapted from author]