Migrant Labor Remittances in Africa: Reducing Obstacles to Development Contributions

  • Date Posted: June 2, 2010
  • Authors: Cerstin Sander, Samuel Maimbo
  • Organizations/Projects: World Bank
  • Document Types: Assessment
  • Donor Type: Multilateral Organization

For many African households and nations remittances are a tremendously important source of finance helping to stabilize irregular incomes and to build human and social capital. Remittance receivers are typically better off than their peers who lack this source of income. At the national level, remittances have a substantial effect on the balance of payments and on foreign exchange revenues. Yet remittance flows for Africa are heavily underreported and, to date, remain in the backwaters of academic study.

This preliminary analysis of migrant remittances in Africa is 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, we identify obstacles that limit the potential for greater contributions.

The study finds that throughout Africa, financial and monetary policies and regulations have created barriers to the flow of remittances and their effective investment. Removing 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.