With less than US$100 million (215.1bn/-) annually from its expatriates abroad, Tanzania is one of the countries in the world that misses out a lot in global remittances that are expected to top nearly US$600 billion (1.290.6trn/-) this year.
Global remittances topped US$580 billion (1,245.5trn/-) in 2014 and are expected to total US$588 billion (1,264.7trn/-) this year.
According to new World Bank figures, Tanzania received a mere US$59 million (nearly 127bn/-) of diaspora savings last year. The amount is peanuts compared to even the US$1,441 million (about 3.1trn/-) Kenyans living abroad sent home.
Remittances to the whole of sub-Saharan Africa in 2014 amounted to US$32 billion (68.8trn/), with Nigeria accounting for two thirds of it.
“Remittances inarguably play a key role in the economies of East African countries (both macro-economic and household benefits),” says the Nairobi-based African Digital Currency Association.
“These monies,” it adds, “play a crucial role in the socio-economic development of the beneficiaries and communities where it is received. Additionally, it contributes to the foreign exchange reserves of beneficiary countries. Remittances in SSA are far more stable than FDI and private financing inflows.”
Like the whole of SSA, Tanzania gets more than what is officially recorded because most remittances are sent home informally and illegally.
Independent analysts also blame the authorities for lack of proper mechanisms to monitor and record the migrant workers’ savings.
According to central bank Governor Benno Ndulu, Tanzania’s raw deal in the lucrative remittances industry is equally a result of fewer expatriates abroad compared to its more benefitting partners in the East African Community (EAC).
Remittance Prices Worldwide (RPW) also associates the poor showing to the exorbitant charges on remittances to SSA. At 9.74 per cent, the region is the most costly region in the world to send remittances to.
“Very few Tanzanians live abroad compared to countries like Kenya and Ethiopia and the reason for that is unlike the two countries most of our people return home after their studies abroad,” Prof Ndulu told The Guardian on Thursday.
He said the Bank of Tanzania was finalising compilation of remittances being sent through banks, other financial institutions, mobile money services and money transfer operators like Western Union.
According to him, the country’s remittances report will be made public next month but did not disclose on which day. The report won’t give the true picture because as the governor put it a lot of remittances come in through informal and illegal channels, which BoT fails to trace and monitor.
“If money is remitted through formal financial channels then the Bank of Tanzania (BoT) can track the money. When informal ways are used, it becomes a big task and a tall order for BoT to track,” Prof Honest Ngowi of Mzumbe University said.
World Bank projections show that Tanzania will this year tap only US$61 million (about 131.2bn/-) of the global remittances. The amount will be the second least in the EAC bloc where Kenya is leader with a 2015 forecast of US$1,571 million.
Second placed Uganda is expected to receive US$1,053 million compared to US$1,029 million last year. Rwandese will send home US$172 million this year against US$170 million that was remitted in 2014 while the amounts for Burundi are US$50 million and US$49 million respectively.
Growth of remittances to the Sub-Saharan Africa (SSA) is projected to slow to 0.9 per cent in 2015, amounting to US$33 billion (about nearly 71trn/-), according to its latest Migration and Development Brief.
“Global remittances, sent home from some 250 million migrants, are projected to grow by 1.3 per cent to US$588 billion (about 1,234.8trn/-),” the global lender notes in its October Migration and Development Brief.
Less than half a million Tanzanians were living abroad in 2010.
SOURCE: THE GUARDIAN
1 comment:
Ndulu's points are invalid and he has no clue why Tz remittances are way lower than those of Kenyans. It's a topic beyond his domain of expertise. He should do some research to get a better understanding.
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