Easy remittance cash making lazy fellows out of Africans

I have just arrived in Chuka, my dusty home town on the eastern side of Kenya. Like in most small settlements in Africa, expectant neighbours, old friends and relatives are here to welcome one of their own from the capital city.

Unlike ten years ago, these kind of outstretched-hands scenes now play out almost every other weekend.

Due to poor national planning, priorities and governance issues, the villagers have trooped to the city that looked greener, leaving most villages to the aged and the more determined who are able to create opportunities with meagre resources. In here, you will also spot a few young ones who are still on their mother’s laps.

It can be a dry run, especially for those used to faster rhythms in urban areas.

But this is not a source of shame to many villagers; in fact, there are hundreds who see it as a blessing of sorts due to the monthly remittances that flow back to the village, in one way or the other.

At a national level, diaspora remittances have become a big item. Today, Kenya pockets an average of $89 million every month, making it a key source of foreign exchange alongside tea, horticulture and tourism.

The rest of the world has its records. A recent World Bank report, the Migration and Development Brief, captures this reality:

• Remittance flows to developing countries are estimated to total $351 billion in 2011, an increase of eight per cent over the previous year.
• Global remittance flows, including those to high-income countries, were an estimated $483 billion in 2011.
• The top recipients of officially recorded remittances in 2011 were India ($58 billion), China ($57 billion), Mexico ($24 billion), and the Philippines ($23 billion). Other large recipients included Pakistan, Bangladesh, Nigeria, Vietnam, Egypt and Lebanon. However, as a share of GDP, remittances were larger in smaller and lower income countries; top recipients relative to GDP were Tajikistan, Lesotho, Nepal, Samoa and Tonga.
• Remittances sent home by migrants to developing countries are three times the size of official development assistance and represent a lifeline for the poor.
• Despite the current global economic weakness, remittance flows are expected to continue growing, with global remittances expected to exceed $593 billion by 2014, of which $441 billion will flow to developing countries.
• Although remittance costs have fallen steadily in recent years, they remain high, especially in Africa and in small nations where remittances provide a lifeline to the poor.

To leverage of the inflows, a number of initiatives have been started. In the case of Kenya, President Mwai Kibaki was recently in London, on the edges of the Olympics, to convince the country’s diaspora to keep sending more to their homeland.

But even as this happened, I spotted some interesting observations gathered by the World Bank, which in my view illustrates what I call the shame of Diaspora remittances to Africa, and which need to be addressed if this kind of cash is to help build the continent:

For instance, why is it that it was mostly the poorest, worst governed countries that had the biggest remittances as a share of the GDP as of 2010?

Back to my small village that could be a microcosm of Africa on matters of remittances. Instead of my kinsmen working hard to produce flowers for Netherlands and coffee for the UK, they have found remittances an easier way to earn a living, something that is likely to complicate development going forward.

Two, they have also embraced the culture of begging from the Disapora, hitherto seen as a no no, whether local or international. This way, the same cycle of donor reliance that continues to stifle most of Africa, is taking root.

So what to do with the Diaspora's cash? In my opinion, it is time local investment minds stepped up their game to assist tap this money gainfully by proposing sustainable projects. This way, it will be a win win, or would it ?

Email: mmicheni@ke.nationmedia.com ; Twitter: wamicheni

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