Africans are paying a “super tax” to send remittances home, because of the high charges imposed by two of the world’s leading money transfer operators –Western Union and MoneyGram. This is the conclusion drawn by the Overseas Development Institute, a London based think-tank, which carried out an extensive study of the cost of remittances paid by diaspora communities from developing countries.
Remittances from diaspora communities play an increasingly important role in supporting the welfare of communities left behind, and they have become a key source of external resource flows for developing countries. According to the latest issue of the World Bank’s Migration and Development Brief, these funds now exceed official development assistance and are more stable than private debt and portfolio equity flows. But a major development institute in London has warned that the benefits of remittance transfers to Africa are lost as a result of the high charges imposed by two of the leading money transfer operators –MoneyGram and Western Union.
This year, remittances to developing countries are expected to top $436 billion and by 2016, are projected to rise to $516 billion. India receives the highest level of remittances, with $70 billion in 2013, while Nigeria is also a large recipient, receiving $21 billion. These funds support education, health, education, food security and productive investment in agriculture and in many developing countries, they surpass earnings from major exports.
In a report issued to coincide with the World Bank’s Brief, the Overseas Development Institute stated that the African diaspora now pay 12% to send $200 – almost double the global average. The report states that “ in effect, Africans are paying a remittance ‘super tax’. Reducing charges to world average levels and to the 5% target would increase transfers by $1.8 billion annually. That figure would pay for the education of some 14 million primary school age children in sub-Saharan Africa –half of the out-of-school total; improved education for 8 million people or clean water for 21 million.
Sources: www.odi.org/remittances-africa & http://blogs.worldbank.org/peoplemove/
Written by Patsy Robertson, Ramphal Institute, Chair
Nigeria, the biggest Commonwealth country in Africa with a population of nearly 190 million, was never going to achieve the goal of a basic education for all children by next year, 2015. Rough estimates suggest that as many as 10.5 million are not in school. But what is worse is that, due to the insurgency in the Northeast, the statistics are now in retreat.
Almost every day the Boko Haram sect, which combines radical Islam with an exploitation of poverty and unemployment among young men, commits atrocities. “Boko Haram,” literally, means “western education is forbidden.” President Goodluck Jonathan has declared a state of emergency in three Northern states – Borno, Yobe and Adamawa – but raids have taken place elsewhere in the North. Last year, for example, there was an attempt on the life of the octogenarian Emir of Kano, in which a number of his bodyguards were killed. The British Council was forced to close its beautiful office and theatre in Kano, decorated in traditional Hausa style, and cut its staff there from over 30 to four.
Boko Haram, which has demanded that President Jonathan convert to Islam, has declared war on modernity, traditional rulers, western education and particularly girls’ education. An attack in February on a Federal Government College in Yobe led to the deaths of 29 secondary students. These “unity schools” are the prestige institutions of public education, and five colleges were closed after the assault, affecting 10,000 students.
Not surprisingly, this is having a woeful impact on educational standards in the Muslim North, which have long lagged behind those in the largely Christian South. National Bureau of Statistics figures for 2012 show that while the national attendance rate for primary schools was 71 per cent, an increase of 10 per cent on 2008, the figures for the Northeast were only 42 per cent, and for the Northwest 47.8 per cent. It is likely that these will have declined since. The impact of the insurgency on literacy rates for women aged 15 to 24 is serious. The rate for these Nigerian women as a whole has fallen to 66 per cent in 2012, down about 14 per cent on 2008. In the Northeast states the comparable literacy rate is only 30.1 per cent.
Statistics suggest that Nigeria has been making progress on other MDGs. For example, maternal mortality has fallen from 800 per 100,000 in 2004 to only 350 per 100,000 in 2012. There is, however, an unmet need for family planning, with only 17.3 per cent of women aged 15-49 using any type of child spacing, and almost none ( 3.3 per cent ) in the poorest households.
There has been criticism of the Nigerian government’s security and negotiation responses to Boko Haram, which has bases in neighbouring countries also. The UN, whose office in Abuja has been attacked, has been slow to define it as an international terrorist organisation. But it is absolutely clear that, without an end to this insurgency, Nigerians in the North of the country will not enjoy the fruits of the MDGs.
Richard Bourne, Secretary of the Ramphal Institute, has been visiting Nigeria for research purposes.