Diaspora remittances to strengthen our economy

Money sent home by Rwandans living in the Diaspora has significantly increased with recent figures putting the total in remittances last year at 23.2 percent, despite the negative impact of the global recession. Remittances have been increasing since 2005 from$42.85million to $139.89 million in 2008, accelerating further to reach $172.40 million last year, statistics from the Diaspora General Directorate under the Ministry of Foreign Affairs indicate. Like Rwanda, each year, millions of other Africans living in Diaspora send billions of dollars in remittances to friends and family members in their countries. These remittances have become a key foreign exchange earner for Africa. However, the remittances should put to meaningful use if they are going to benefit the larger society. Last year, the Rwandan Diaspora together with the National Bank of Rwanda (NBR) announced that they had finalized plans to establish an investment fund - the Rwandan Diaspora Mutual Fund (RDMF) which was adopted by the 2008 Diaspora Retreat. Mutual Fund will be invested in treasury bonds, guaranteed by NBR and at a later stage the interest gained from the bonds will be invested in higher risk products such as corporate. This is a beautiful idea but those in charge should walk the talk. Africa still has the largest proportion of people suffering from chronic hunger with the highest population of the undernourished. This is despite the continent’s rich endowment in both human capital and natural resources. Though it’s self evident that increase in remittances is due to trust and confidence Rwandans in Diaspora have in the government, putting in place conditions like reduced cost of remittances, softening transfer regulations at both ends of the chain, sensitizing financial operators on the market potential or directing Diaspora where to invest with quick returns will surely increase remittances flow and spur direct investment. Ends

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Diaspora remittances to strengthen our economy