Money Transfers from Rwandans in the diaspora into the national economy have increased by 19.7 percent from US$103.03 million (Rwf57.3 billion) in 2007 to US$128.24 million (Rwf71.3 billion) as of November this year, the central bank governor said on Monday.
Francois Kanimba, head of the National Bank of Rwanda (NBR) said that data captured from specialised institutions like Western Union, Moneygram and Money Trans the firms involved in money transfer business show that US$32.61 million (Rwf18.1 billion) in 2007 was remitted into the economy compared to US$25.09 millions (Rwf16.2 billion) in 2006, an increase of 43.4 percent.
He was speaking at the Rwandan diaspora retreat. Kanimba said that inflows through specialised institutions amounted to US$98 millions in November this year but are expected to reach US$39 millions (Rwf21.7 billion) by end 2008, which represents an increase of 20 percent.
According to the governor, reports on foreign exchange operations show that transfers from diaspora through commercial banks reached US$28.3 millions (Rwf15.7 billion) in 2007 against US$17.4 millions (Rwf9.7 billion) in 2006, an increase of 62.6 percent.
However, he noted that formal channels for diaspora transfers didn’t capture all sources of harvetsing the critical information adding that a sizable chunk of the transfers are passing through informal channels like cash carried across borders in pockets.
According to statistics, the informal transfers are still high, something the governor said could be a result of the high level of charges levied by the formal operators.
The estimated informal transfers from diaspora is projected to have doubled in 2007 from US$21.61 Million (Rwf12 billion) in 2006 to US$42.17 million last year.
‘The estimate for informal transfers stands at US$58.68 million (Rwf32.6 billion) as of November 2008’, Kanimba said.
He said NBR may consider creating a mechanism that would use an account opened in central bank as a receiver for all diaspora transfers for free but says that the Rwandan Diaspora should be well organised to facilitate that mechanism to be operational so that its efficiency could be assured.
This comes on the heels of an information memorandum from the World Bank to the effect that plans are underway to tap into diaspora remittances to fund part of the bank’s proposed US$13 billion projects in Africa over the next the two years through a structured fund that will support the continent’s development goals.
Diaspora remittances have become a key foreign exchange earner for Africa with about US$5 billion released annually but the piecemeal nature in which they are doled out has limited their impact on the continent.
The US$128.24 million remittances represent 41.8 percent of Rwanda’s total export earnings as of August this year, only falling one step below tourism receipts, the country’s top export earner.
‘Many Governments now consider remittances to be of a high policy interest and are trying to analyze their impact on African economic development’, Kanimba said adding that ‘remittances are still a challenge to measure as they are heterogeneous in nature coming from numerous destinations’, he added.