Remarks on “Sending Money Home to Africa” IFAD Report

Remarks on “Sending Money Home to Africa” IFAD Report

Borany PenhOffice of Poverty Reduction

Global Forum on Remittances

Tunis, Tunisia

October 22, 2009

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Continues international highlight on importance of remittances

New data & perspectives about remittances markets and players

Africa focus, disaggregation by regions & gender Identifies issues requiring multi-stakeholder

attention: private sector, governments, donors, MFIs, regional orgs, think tanks, etc.

Reaffirms importance of rural outreach, financial literacy, capacity building, and innovation

Report’s Contributions

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Follow-on Recommendations

contextualize within global recession and its aftermath

present risks as well as opportunities with change

disaggregate data and analysis within countries

more in-depth research on informal remittances systems in Africa: incentives, actors, integration, etc.

discuss linkages to diaspora engagement & development

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Remittances & Poverty Reduction?

• Poverty reduction impact of remittances ambiguous: consumption vs. investment? reduced incentive to produce and innovate?

• More impact from: improving overall business enabling environment for savings

& investment? complementary partnerships between market actors, ex:

banks & MFIs?

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Diaspora & Development

Remittances are just one form of diaspora engagement…

and P2P private transfers.

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USAID’s DNA Framework

• USAID’s diaspora public-private alliance framework

• DNA: migrants’ connection to homelands

• Enables partnerships between USAID and diasporas through knowledge development, engagement, and operational work.

• DNA mechanisms: ADM & Haitian DM

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Diaspora & Development (2)

• Greater development impact from “Diaspora Direct Investment” or “collective remittances”?

• Most USAID diaspora engagement experience in Latin America

• Need better understanding of other diaspora communities & networks (behavior, risk appetite, resources, etc.)

• New pilot research & development programs, ex: African Diaspora Marketplace

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What is ADM?

• A $2m business plan competition open to U.S.-based African diaspora

• Goal: boost economic opportunities and employment in SSA

• A GDA partnership with Western Union, Ecobank, OPIC, & others

• Learning pilot

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Additional Resources

• www.usaid.gov/gda• www.diasporamarketplace.org • www.microlinks.org • www.povertyfrontiers.org