Introduction and Summary • 5
Figure 2 Remittances and Other Resource Flows to Africa, 1990–2010 60 FDI 50
US$ billions
40 Official aid
30
Recorded remittances
20 10 0 Portfolio equity & private debt
–10
03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 e
02
20
01
20
00
20
99
20
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
19
19
90
–20
Source: Authors, based on data from the World Bank Global Development Finance 2010 database. e = estimated.
labor market rigidities and reforms aimed at improving competitiveness to limit the potential danger of excessive exchange rate appreciation. Large remittance inflows could also impair growth by reducing the supply of labor, although there is little evidence of this effect. Remittance flows are likely significantly underestimated: only about half of the countries in Sub-Saharan Africa collect remittance data with any regularity, and some major receivers of remittances report no data at all. Few African countries report monthly or quarterly data on remittances. African central banks and statistical agencies can improve the woefully inadequate collection of data on remittances by expanding the reporting of remittances from banks to other providers of remittance services, such as companies that facilitate money transfers, post offices, savings cooperatives, and microfinance institutions. They can use household surveys and surveys of emigrants to estimate remittance flows through formal and informal channels. Labor ministries and embassies in destination countries can also help estimate the volume and costs of remittance transactions. Policy makers need to increase the transparency and efficiency of the markets for remittance services. The cost of sending remittances to Sub-Saharan Africa averaged almost 12 percent of a $200 transaction, compared with less than 8 percent for most other developing regions. The cost of cross-border remittances within Africa, if permitted at all, tends to