According to a joint report issued by the World Bank and the Central Bank of Kenya on remittances, sub-Saharan Africa (SSA) trails other regions in its annual share of remittances and that it should embark on actionable steps to raise them in order to fund most of her developmental projects or needs. The report indicated that total remittances to Sub-Saharan Africa were expected to rise by 2% in the year from 21 billion dollars recorded in the preceding year, despite the global economic downturn (Reuters, October, 2010).
This figure is not very much on the high side as compared to the proportion received by countries such as Mexico, according to the report. This means that the subcontinent is trailing in cashing in on the benefits accrued from remittances from our brothers and sisters who are domiciling outside the shores of Africa; and thus calls for our governments to act, but decisively.
Despite the fact that remittances contribute immensely to the economic development of developing and emerging nations, unfortunately, most of the money sent home by migrants are unrecorded, and thus do not enter many countries’ national statistics. Development planners more often than not increasingly lay emphasis on the importance of tracking these moneys, which will help governments try to increase remittances as a source of development finance and better channel them into productive sectors such as health, education, and industry.
As a result of the leverage remittances from the Western developed world offer developing nations, even emerging economies such as Brazil, India, Philippines, among others, offer incentives to attract such transfers into local savings and investment funds. It is thus not unusual that in most developing countries, researchers and policy makers are talking about brain gain and not brain drain: as we lose our skilled nationals to the developed western countries, we also gain on their hard earned currencies which are used to put our economies in the right shape.
Remittance flows represent a significant share of gross domestic product (GDP) for many African countries. According to Benjamin Musuku, World Bank’s head of its Future of African Remittances program, even in smaller economies like Cape Verde and Lesotho, funds sent home by their nationals abroad account for more than a quarter of their GDP. In his view, “these are quite significant flows going into these countries and hence the need to have a [very] focused strategy on how remittances can be used to leverage development.”
Although the above might represent a good indicator for our governments to be happy about, the sad reality is that a huge chunk of the moneys is not accounted for: they go down the gurgler. The World Bank has estimated that 20% of remittances are not captured officially: they are sent via unofficial channels. Measures that have been earmarked in enhancing the share of the continent’s remittances consist of efficiency of data collection, use of technology and a risk-based approach to supervision.
As much as I agree to the above measures in curbing the tide of the unofficial channels of remittances, and increasing patronage of the official channel, I believe that more effort should be channeled into technological efficiency and appreciation. This way, VoiceCash has shown the way. Their innovative product—the VoiceCash Prepaid Twin MasterCard—a 21st century innovative automated teller machine (ATM) card used to wire moneys to people in all corners of the world offers remitters a convenient, relaxed, and efficient way of sending moneys to their loved ones (children, spouses, relatives, friends, etc.).
As more and more people patronize the VoiceCash Prepaid Twin MasterCard, they are not only helping their relatives, and other dependents; they are also helping others through their contributions to the gross domestic product of their nation. This is because the efficiency, better rates, convenience, receipt of money in real-time, offered by the usage of the card enables them to patronize the formal track of wiring money to their countries.
This eventually leads to a burgeoning of the gross domestic product; which means that the respective governments can embark on building more infrastructures (roads, hospitals, schools, etc.). Again, it emancipates remitters, not only from the risk inherent in utilizing the unofficial channels, but also from Money Transfer Organizations (MTOs) that are ripping them not only off, but apart. With the innumerable benefits offered by the VoiceCash Prepaid Twin MasterCard, why not give it a try if you reside in Germany or Austria.
By Kingsley Nyarko, PhD, Educational Psychologist, Accra
Check out more about VoiceCash on www.voicecashcard.com.
By Kingsley Nyarko, PhD, Educational Psychologist, Accra (email@example.com)