Africa: Why Money Sent Home Is Better Than Foreign Aid
Thursday, April 4, 2013
The African diaspora is a major source of foreign income so large that it now outstrips foreign aid sent by Western donors. Nearly 140 million Africans live abroad. The money they send back home, remittances, is worth far more – in value and usefulness – than the development donations by Western financial institutions.
The exact amount of these remittances is unknown because not all of it is sent through official banking channels. But the official volume to the continent has gradually increased over the years, from $11 billion in 2000 to $60 billion in 2012, according to the World Bank. As a proportion of gross domestic product, remittances in Africa range from next-to-nothing to almost five per cent.
Worldwide remittances to developing countries were $351 billion in 2011, far exceeding the $129 billion in official development assistance, according to the World Bank.