Rwanda’s private inflows from abroad are expected to reach $175m (Rwf99.6b) by the end of this year with an increase of 30 percent from last year, the National Bank of Rwanda has said.
This follows an increase by 24 percent in the first half of 2009, beating earlier forecasts that remittances will drop by 15 percent at the end of the year.
In the first six months of this year statistics indicate that $85.69 million (Rwf48.39 billion) was remitted into the economy compared to $69.13 million (Rwf38.9 billion) in the same period last year.
“Rwandans abroad have been transferring significant amounts of money to their relatives and families. The large amount of this money goes mainly to social assistance,” Francois Kanimba, the Governor Central Bank told Business Times in an interview recently.
Kanimba attributed the growth in remitances to government government progammes that have facilitated diaspora Rwandan to invest in the country.
This year the Central Bank established an investment fund known as the Rwandan Diaspora Mutual Fund to facilitate citizens abroad to invest in their home country through remittances as a way of contributing to national development.
Kigali City Council is also developing a framework that will facilitate and make it easy for the Diaspora to acquire land and housing.
According to the World Bank remittance inflows to developing countries could fall by between one percent and six percent this year from last year, as a result of the global recession.
Central Bank says that Western Union, which is the major avenue through which Rwandans in Diaspora remit the money into the economy, transferred around $20.59 million (Rwf11.6 billion) compared to $19.43 million (Rwf10.9 billion) last year.
Transfers through commercial banks reduced to $18.56 million from $19.43 million last year as the informal channel transfers increased $44,66m compared to $3114m last year.
The remittances into Rwanda from abroad have been increasing over years, becoming a major foreign exchange revenue source.
According to the World Bank, Rwandans in the Diaspora remitted over $60 million in 2006 while in 2007 remittances almost doubled to over $110 million.