Presentation: African Institute Remittance Project - Africa

African Union Commission
ARI Project: Context
• Recent African Diaspora in Europe: 3.3 millions of
whom 1.000,000 from SSA
• Recent African Diaspora in USA: 1.000,000
• Recent African Diaspora in Canada: 300,000
• Remittances from EU27 (2004): 26,8 billions
Euros from which 12% 93,2 bn) to SSA
• Recorded remittances to Africa: $10-40 bn,
representing significant proportion of GDP (25%
for Liberia,) : exceed several total FDI and
assistance in many African countries
• Main remitting EU States: UK, France, Italy,
Germany, Spain, Netherlands and Belgium
• Conventional practices still prevailing in Africa:
Immediate recipient household consumption
needs: education & health services, SMME
financing, community infrastructures (roads,
water supply, etc)
• Innovative & creative measures uses of
remittances in Latin American Countries as
development tools and instruments, enhance
the development impact on poverty reduction
ARI Project: Background
• Migration Policy Framework for Africa
• Joint Africa-EU Declaration on Migration and
• Ministerial Conference of Least developed
Countries on Enhancing Development Impact
of Remittances (cotonou)
• Lisbon Summit Action Plan and Africa EUStrategic Partnership
ARI Project: the challenges and constraints to
leveraging remittances to boost development efforts
• Low levels of domestic financial development
including lack of access to finance in rural areas
• High cost of investment banking and absence of
credit rating services
• Inadequate regulatory capacity and lack of
transparency and competition in remittances
services contributing to high-cost of remittance
• Inadequate financial and institutional support for
the effective use of remittances and other Diaspora
resources for Africa development
African Union willing to seize the opportunity to:
Maximize the development effects of
Improve remittances transfer mechanisms
African Institute Remittance
• Essential of the Core Objective:
 Capacity building of MS of the AU, remittances senders
and recipients, private sector, universities and other
stakeholders to develop and implement concrete
strategies and operational instruments to use
remittances as development tools for poverty
 Strengthening partnership between key stakeholders
the AU, WB, IOM, ADB,UNECA and African Diaspora in
the areas of remittances in particular and development
in general
ARI: Outcomes
• Devising policies to create an enabling
institutional policy environment and regulatory
• Improved methodologies for recording and
analysis of remittances and migration data
• Proposed regulated frameworks and encourage
competition to achieve reduction in transfer costs
• Diaspora bonds, remittances securitized for
credit/loans access from global financial markets
• Remittance-based Investment Fund established
and accessed by stakeholders
ARI: Estimated Results
1. ARI created and has operational networks in
stakeholders and beneficiary organizations
2. Governements in remittance receiving countries
sharpen development impact of remittances
through application of appropriate policies
3. Improved financial access and banking
products/services for remittance senders and
4. Regulatory regimes preventing financial abuse and
facilitating remittance flow thru formal channels
ARI: Estimated Results: Cont…
5. Dissemination of data on remittance fees in
major corridors improved
6. Remittance transaction costs reduced
7. Voluntary code of conduct for delivering fair
value transfers implemented
8. New regulations and instruments for the
Diaspora developed
9. Diaspora bonds issued, and remittances
scrutinized for credit/loans access from the
global financial market
10. Remittance-based investment Fund established
ARI: Activities
• Provide technical assistance to GVT institutions in
putting in place the regulatory frameworks
• Carry out training and capacity building
• Study remittances flows within Africa
• Policy research and dialogue on how remittances
can contribute to the development of Sub-Saharan
• Develop content and technology platforms for
country-based payment and settlement systems for
ARI: Activities, Cont…
• Develop partnership between ADB, African
Central Banks and remittance companies to
improve financial access
• Disseminate of data and research
• Prepare annual reports and annual
conferences and meetings of policy makers
ARI Project: Organizational Structure and
Governance arrangements
• WB: Overall Project Management
• AUC: Implementation
• AFDB, IOM: Partners and support to the
management and implementation
• Steering Committee: B, AUC, AFDB & IOM
Specific Activities to be undertaken to start
• Preparatory Phase (2010-2012):
- The World Bank is responsible for research, studies,
capacity building and networking activities
- The AUC is responsible for conducting 5-6 regional
consultative meetings on the ARI Project idea
- Ministerial Meeting at the end of the Preparatory
Phase to decide on the creation of the ARI or
whatever strategy based on the knowledge
generated during the Preparatory Phase activities
Specific Activities to be undertaken to start
• Establish the Steering Committee composed with AUC,
World Bank, EC, ADB, IOM
• Set up office/Secretariat to the Committee at the AUC
• Identify and recruit staff for Secretariat to the Steering
Committee: Head and 2 economists
• Establish links into the AUC: Interdepartmental Team of the
ARI Project established and functional
• Establish links with country Diaspora focal points
• Establishment of the Technical Committee under the World
Bank which will present a draft on this structure