ACCRA, Feb. 19 (Xinhua) -- Africa stands to gain more from remittances than from development aid, Chief of Mission for the International Organization for Migration (IOM) Sylvia Lopez-Ekra said here on Tuesday.
Speaking to Xinhua on the sidelines of the African Caribbean Pacific (ACP) and European Union (EU)-IOM Regional Summit here, Lopez-Ekra called for policies put in place by stakeholders in Sub-Saharan Africa (SSA) that will enable remittances to deepen their critical role in development.
"When we look at the development potential of migration, one key element of that is remittances. Remittances are sent by migrants to their families left behind," she pointed out.
A study carried out by the IOM in Ghana revealed that every other household receives remittances from abroad from loved ones.
"Those remittances go to feed children; they have direct impact on nutrition; it is used for health, it is used for nutrition; so the impact on human capital development is extremely important," Lopez-Ekra observed.
Already, remittances outstrip development aid in Sub-Saharan Africa, reaching 38 billion U.S. dollars in 2017 from 34 billion dollars in 2016. Development aid to Africa on the other hand rose by 3.0 percent to 29 billion dollars in 2017 and, within that, aid to sub-Saharan Africa was also up 3.0 to 25 billion dollars .
One of the critical measures, needed which was also on top of the agenda at the Accra summit was the reduction in the cost of remittances to Africa.
The regional summit focused on the Sub-Saharan Africa, which is the most expensive region to send remittances to with 9.4 percent on average of the amount sent being spent on transfer cost.
"So this is the amount that is not going to health; is not going to education; is not going to nutrition; is not going into investment of saving. That is the amount that is spent on transfer cost. If we are comparing remittances and development aid, remittances are much higher and I think migrants will always send money back home," she noted.
The official urged the region to create the policy space and make sure that the households also had financial literacy so that they could make good choices, between spending just on consumption and a little bit going into saving.
Director of Diaspora Affairs at the Office of the president in Ghana Akwasi Awuah Ababio noted the resolve of the government of Ghana to seek solution to the high cost of remittances in order to leverage its potential for development.
"Reducing remittance cost is a priority for the government of Ghana who is aware of the significant missed opportunity of leveraging this amount for the development of the country," he added.
