President
Dr John Pombe Magufuli in conversation with former CUF Chairman, Prof
Ibrahim Lipumba at the State House yesterday in Dar es Salaam. The
former opposition leader congratulated the President and commended his
recent 11th National Assembly inaugural address. (Photo: State House)
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
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