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Remittance flows to Kenya and Ethiopia from their diaspora are significantly above average compared to the rest of the Sub-Saharan Africa, according to a new World Bank report.
The bank’s Migration and Development brief says remittance flows have stalled to less than one per cent increase over the past three years, but Kenya and Ethiopia are the only East African countries bucking the trend in Africa.
The Central Bank of Kenya says that the 12-month cumulative inflows from the diaspora to August increased by 9.2 per cent to $1,510 million from $1,383 million recorded in the same period in 2014.
Remittance to Ethiopia has increased in the past couple of years and expected to grow by over 50 per cent in the next three years, says the World Bank.
The National Bank of Ethiopia reported last year that official receipt of remittances hit $1.5 billion — a 88 per cent jump over its value in the previous year.
Figures for Tanzania have been difficult to obtain over the past two years but the Ugandan Government reported at the end of last year that private capital remittances sent by Ugandans in the diaspora dropped by $233 million over the previous year.
The World Bank says that financial flows from the Africa diaspora back to the Sub-Saharan region fell by nearly seven per cent over the past five years but are expected to rise in 2016.
The report shows that the growth in remittances fell to just 0.4 per cent last year from 7.6 per cent in 2010 but is expected to rise by 3.3 per cent next year.
Overall, this has meant that remittances have stagnated over the past five years, remaining at around $32 or 33 billion.
However, they are now expected to rise to $37 billion by 2018.
Weak economies in Europe, especially Russia, are slowing the growth of remittance flows in 2015, says the report.
Weaker currencies vis-à-vis the US dollar, and lower oil prices are further restricting the ability of many migrants to send money back to family and friends.
Remittances to developing countries are expected to reach $435 billion in 2015, registering a modest growth rate of two per cent from last year.
This represents a significant slowing in the growth of remittances from the rise of 3.3 per cent in 2014 and of 7.1 per cent per year from 2010-13.
Global remittances, sent home from some 250 million migrants, are projected to grow by 1.3 per cent to $588 billion.
Slowing remittances this year will affect most regions, in particular Europe and Central Asia where flows are expected to decline by 18.3 per cent in 2015.
– Daily Nation