AFRICA-EU STRATEGIC PARTNERSHIP

SENIOR OFFICIALS MEETING (SOM),BRUSSELS, 15-17 SEPTEMBER 2010

AFRICAN INSTITUTE REMITTANCE PROJECT

African Union Commission

ARI Project: Context• Recent African Diaspora in Europe: 3.3 millions of

whom 1.000,000 from SSA• Recent African Diaspora in USA: 1.000,000• Recent African Diaspora in Canada: 300,000• Remittances from EU27 (2004): 26,8 billions

Euros from which 12% 93,2 bn) to SSA• Recorded remittances to Africa: $10-40 bn,

representing significant proportion of GDP (25% for Liberia,) : exceed several total FDI and assistance in many African countries

• Main remitting EU States: UK, France, Italy, Germany, Spain, Netherlands and Belgium

• Conventional practices still prevailing in Africa: Immediate recipient household consumption needs: education & health services, SMME financing, community infrastructures (roads, water supply, etc)

• Innovative & creative measures uses of remittances in Latin American Countries as development tools and instruments, enhance the development impact on poverty reduction

ARI Project: Background

• Migration Policy Framework for Africa• Joint Africa-EU Declaration on Migration and

Development• Ministerial Conference of Least developed

Countries on Enhancing Development Impact of Remittances (cotonou)

• Lisbon Summit Action Plan and Africa EU-Strategic Partnership

ARI Project: the challenges and constraints to leveraging remittances to boost development efforts

• Low levels of domestic financial development including lack of access to finance in rural areas

• High cost of investment banking and absence of credit rating services

• Inadequate regulatory capacity and lack of transparency and competition in remittances services contributing to high-cost of remittance transfers

• Inadequate financial and institutional support for the effective use of remittances and other Diaspora resources for Africa development

Opportunities

African Union willing to seize the opportunity to:

Maximize the development effects of remittances

And

Improve remittances transfer mechanisms

African Institute Remittance• Essential of the Core Objective:

Capacity building of MS of the AU, remittances senders and recipients, private sector, universities and other stakeholders to develop and implement concrete strategies and operational instruments to use remittances as development tools for poverty reduction

Strengthening partnership between key stakeholders the AU, WB, IOM, ADB,UNECA and African Diaspora in the areas of remittances in particular and development in general

ARI: Outcomes• Devising policies to create an enabling institutional

policy environment and regulatory frameworks• Improved methodologies for recording and analysis

of remittances and migration data• Proposed regulated frameworks and encourage

competition to achieve reduction in transfer costs• Diaspora bonds, remittances securitized for

credit/loans access from global financial markets• Remittance-based Investment Fund established

and accessed by stakeholders

ARI: Estimated Results1. ARI created and has operational networks in

stakeholders and beneficiary organizations2. Governements in remittance receiving countries

sharpen development impact of remittances through application of appropriate policies

3. Improved financial access and banking products/services for remittance senders and recipients

4. Regulatory regimes preventing financial abuse and facilitating remittance flow thru formal channels established

ARI: Estimated Results: Cont…5. Dissemination of data on remittance fees in

major corridors improved6. Remittance transaction costs reduced7. Voluntary code of conduct for delivering fair

value transfers implemented8. New regulations and instruments for the

Diaspora developed9. Diaspora bonds issued, and remittances

scrutinized for credit/loans access from the global financial market

10. Remittance-based investment Fund established

ARI: Activities• Provide technical assistance to GVT institutions in

putting in place the regulatory frameworks• Carry out training and capacity building

programmes• Study remittances flows within Africa• Policy research and dialogue on how remittances

can contribute to the development of Sub-Saharan Africa

• Develop content and technology platforms for country-based payment and settlement systems for remittances

ARI: Activities, Cont…

• Develop partnership between ADB, African Central Banks and remittance companies to improve financial access

• Disseminate of data and research• Prepare annual reports and annual

conferences and meetings of policy makers

ARI Project: Organizational Structure and Governance arrangements

• WB: Overall Project Management• AUC: Implementation• AFDB, IOM: Partners and support to the

management and implementation • Steering Committee: B, AUC, AFDB & IOM

Specific Activities to be undertaken to start implementation

• Preparatory Phase (2010-2012):- The World Bank is responsible for research, studies,

capacity building and networking activities- The AUC is responsible for conducting 5-6 regional

consultative meetings on the ARI Project idea- Ministerial Meeting at the end of the Preparatory

Phase to decide on the creation of the ARI or whatever strategy based on the knowledge generated during the Preparatory Phase activities

Specific Activities to be undertaken to start implementation

• Establish the Steering Committee composed with AUC, World Bank, EC, ADB, IOM

• Set up office/Secretariat to the Committee at the AUC• Identify and recruit staff for Secretariat to the Steering

Committee: Head and 2 economists• Establish links into the AUC: Interdepartmental Team of the

ARI Project established and functional• Establish links with country Diaspora focal points• Establishment of the Technical Committee under the World

Bank which will present a draft on this structure

THE END

THANK YOU FOR KIND ATTENTION