afrol News, 28 October - An international forum on remittances to Africa has endorsed a series of recommendations to reduce transfer costs and exploit the potential of remittances as a development tool in the continent.

The Global Forum on Remittances, co-hosted by the International Fund for Agricultural Development (IFAD) and the African Development Bank (AfDB), which ended recently in Tunis, brought together more than 200 participants involved in the sending home of money by workers living abroad.

Financial institutions, development agencies, private banks, money transfer companies, telecoms operators, migrant diaspora groups and NGOs gathered in Tunis on 22-23 October.

At the closing session, the Forum participants called for, amongst others, the increased competition in a market dominated by two major money transfer groups, the empowerment of market actors, effective and efficient regulation, the adoption of new technologies and the expansion of access to financial services, especially in rural areas.

The forum also urged that more market actors, especially microfinance institutions, post offices and credit unions, be enabled to act as pay-out locations. This, according to the participants, would not only increase outreach to rural areas where people travel long distances to cash their money but would also make it possible to cross-sell other services and provide financial education.

At the G8 summit in L’Aquila in July, world leaders recognised the importance of remittances for development and pledged to reduce the cost of remittance by 50 percent in the next five years, by promoting a competitive environment and removing barriers. The G8 Working Group on Remittances is meeting in Rome next month.

Some 30 million Africans live abroad and remittance flows to and within the continent approached $40 billion, according to an IFAD report - Sending Money Home to Africa - which was presented at the event.

The report found that in four out of five African countries, governments restrict the type of financial institutions able to offer remittance services.

The number of payout locations across the entire African continent is the same as Mexico, which has only a tenth of Africa’s population, the report found.

The forum also urged that exclusivity agreements that hamper competition be discontinued, that standards and interoperability be encouraged, that remittances should not be subject to taxation and that ways be found to link rural areas in Africa with mobile phone and other non-cash technologies.

By staff writer

© afrol News

Related pages and feature

Current afrol News Top Stories