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Diasporans remit US$361 million
The Herald
December 07, 2007

http://allafrica.com/stories/200712070051.html

Zimbabweans in the Diaspora sent home US$361 million last year excluding hand-in-hand transfers, representing 7,2 percent of the country's 2006 GDP, according to data compiled by the International Fund for Agricultural Development.

IFAD is a specialised United Nations agency whose goal is to empower poor rural women and men in developing countries to achieve higher incomes and improve food security. It was borne out of the 1974 World Food Conference, and began full-scale operations three years later.

Of the 30 million sub-Saharan Africans in the Diaspora, Zimbabwe has an estimated 3,5 million people. The fluid migration within West Africa, for instance, is partly due to the region's status as a geopolitical and economic unit, but also by a common history, culture and ethnicity among many groupings. There is also significant international migration to former European colonial powers, such as France, England, the Netherlands and Italy, among other countries.

Remittances in Africa as a whole totalled US$40 billion with Southern Africa making up about 11 percent or US$4,4 billion. South Africa had the highest flow in the region with US$1,4 billion or 0,6 percent of that country's GDP, Zambians sent around US$201 million, representing 1,8 percent of that country's GDP, more than what the Zambian government collects from mineral royalties. North Africa had the highest with remittances just over US$17 billion IFAD said that the importance of remittances to poverty alleviation is obvious, but the potential multiplier effect on economic growth and investment is also significant. The driving force behind this phenomenon is an estimated 150 million migrants worldwide who sent more than US$300 billion to their families in developing countries during 2006, typically US$100, US$200 or US$300 at a time, through more than 1,5 billion separate financial transactions.

These funds are used primarily to meet immediate family needs (consumption) but a significant portion is also available for savings, credit mobilisation and other forms of investment. IFAD, however, said that the money transfers face two main challenges: high rates of informality particularly within the continent, and a regulatory environment that foments monopolies. In turn, transfer costs are higher and remittance senders obtain less value for their money.

These high rates of informality have led to the growth of the parallel market where higher premiums are obtained as compared to the official market. Remittances, the portion of migrant workers' earnings sent back home to their families, have been a critical means of financial support for generations. But, for the most part, these flows have historically been "hidden in plain view", often uncounted and even ignored.

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