Remittance and Other External Financial Flows to Africa

In 2012, for the first time, remittances became the largest external financial source to Africa, ahead of Foreign Direct Investment (FDI) and Other Development Assistance (ODA). 

According to African Economic Outlook, (2013) more than 30million Africans (about 3% of its population) are living outside of their home country, remitting 11% of global remittances in 2012, compared to 8% in 2001. Nigeria receives between 30% and 60% of remittance in the African region(Orozco, 2003).The World Bank (2012) reported that the top recipients of officially recorded remittances for 2012 are India($70 billion), China ($66 billion), the Philippines and Mexico ($24 billion each), and Nigeria ($21 billion).

Remittances are mostly sent to Africa through informal channels; hand carried during visits to home countries and households, sent through transport companies or delivered through other informal channels largely due to limited access to and the high cost of formal financial (banking) services relative to average per capita incomes in African countries (Pendleton and others 2006; Bracking and Sachikonye 2008; Tevera and Chikanda 2009). According to International Fund for Agricultural Development (IFAD, 2009) large share of remittances from outside Africa is channeled through a few large international money transfer agencies, who in sole partnership with African banks and post offices.

Irving,Mohapatra, and Ratha (2010) found that almost 70% of central banks in Sub-Saharan Africa cited high costs as the most important factor inhibiting the use of formal remittance channels. Innovative options such as mobile money transfer are getting popular but adoption of these has been limited mostly to domestic money transfers, largely because of concerns about money laundering and terrorist financing. These technologies have the potential to vastly improve access to both remittances and broader financial services, including low-cost savings and credit products, for African migrants and remittance recipients.

Remittance receiving households in Africa usually save remittance money in some type of financial institution rather than put it under the mattress. These steady stream of remittances receipt can be used as a factor in evaluating the credit worthiness of recipients for microloans, consumer loans, and small business loans (for example, to purchase agricultural equipment [Ratha, 2007]). Not only has a number of research found that bulk of remittances are used for consumption or investment in human capital (education, health, better nutrition), data from a multiple surveys and story-telling evidences indicate remittance has been found to provide initial capital to starting a business thereby stimulating entrepreneurship (De Haan et al., 2000;De Haan, 2000 Dermendzhieva, 2011; Cortes, 2007).

Identifying these poverty-eradicating and sustainable development potentials of remittance, World Bank recently initiated a global Knowledge Partnership on Migration and Development (KNOMAD), which is aimed at facilitating multidisciplinary debate and discussion on migration issues, developing policy options, and assisting sending and receiving countries implement pilot policies. While KNOMAD is on one hand, there is growing debate on how to use remittance in sustaning development in Africa through financial market linkages examples are the diaspora bond, collateral securitization, among others.

So what are your experiences with remittance as an African in diaspora? Do you feel the cost of sending money to Africa is too high? What are your suggestions on making remittance work for sustainable development in Africa? Do you have anything to share with our team on remittance in Africa in General?

Join me on twitter Tweet to @seunoyeniran

use the hashtag #econochart to sustain the conversation.

Nigeria in 2014: The African telecommunication sector will grow and quality is expected to improve in Nigeria

Part of research conducted by Informa Telecoms & Media, entitled: Africa Telecoms Outlook 2014: Maximising digital service opportunities, identifies mobile broadband and the increase in global connectivity as key drivers behind this projected growth. According to statistics revealed in the research, there were 778 million mobile subscriptions in Africa by end June 2013 and the expectation is that the mobile-subscription count will reach one billion during 2015. Contrary to what is being experienced in other regions, in Africa mobile voice revenues are expected to grow over the next few years. The research adds that annual mobile data revenues on the continent are expected to rise from US$8.53 billion in 2012 to US$23.16 billion in 2018. Data accounted for 14.3% of mobile service revenues in Africa in 2012 but will account for 26.8% in 2018. “The growth in data revenues in Africa is being driven by factors including: the continent’s new submarine and terrestrial cables; the rollout of mobile broadband networks; the increasing affordability of data devices; and economic growth. As well as facilitating a rise in data connectivity in Africa, these factors are creating a platform for a range of new digital services on the continent, such as mobile financial services, e-commerce and digital content and services for the business market,” states an excerpt from the study. In an article on BizTech Africa, Nigeria govt talks tough over service quality, Minister of Communications Technology, disclosed at media parley with senior journalists, said the Ministry of Communication Technology, the Consumer Protection of Nigeria (CPN) and the regulator, the Nigerian Communications Commission (NCC) are collaborating to sanction or prosecute erring telecoms operators that have been delivering poor quality service to Nigerians. The Minister said “the Federal Government will no longer condone poor service delivery to subscribers and reiterated that henceforth, it’s no longer shall be business as usual, and operators must rise up to redress the current poor state of quality service delivery.” Another related development is the reduction in the cost of Right of Ways (RoW) in certain states in the country which will facilitate the roll-out of telecoms infrastructure in the country. Association of Licensed Telecoms Operators of Nigeria (ALTON) identified that this reduction would definitely impact on telecoms service delivery. It will be interesting to keep tab on events as they unfold in 2014.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter Tweet to @seunoyeniran

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Nigeria in 2014: CNN will capture more African market/audience, other TV service providers will be attracted

CNN International is proposing to launch a new TV show titled African Start-Up, which will join the existing African Voices, CNN Marketplace Africa and Inside Africa programs is a bid for the globally acclaimed news company to cement its long standing commitment to Africa. The new series, airing as a weekly segment and then bi-Monthly as a half hour special, follows several small and medium-sized Enterprise and Entrepreneurs in various African countries to see how they're working to make their dreams become reality. One of African Start-Up production is ‘Nigeria iTunes’ which explores how ideas are generated, business plans formulated, capital raised and distribution model for products defined. The entrepreneurs take viewers through their daily challenges, charting both the setbacks and the opportunities that exist for those with the vision and creativity to try something new. The weekly segment is set to air in January 2014. Just as the entry of Starbucks (world leading coffee company) is an indication of economic growth in a country or community it venture into, the expected implication of the CNN move is that more TV service providers will be looking forward to the African market which seems booming at the moment.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter Tweet to @seunoyeniran

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Nigeria in 2014: Higher use of technology will lead to better governance

Since Barack Obama signed the Memorandum on Transparency and Open Government on his first day in office, eventually led to Data.gov, African countries have also made efforts to have similar open data portal and Kenya in particular is playing leading role in this regard with the www.opendata.go.ke. The Nigerian National Bureau of Statistics (NBS) is making similar effort with the www.nigerianstat.gov.ng. The story of governance in Africa though punctuated by war, coups de etat and not-so-democratic elections is also full of stories of democratic progress and innovation. Technology is playing a role on the demand side of governance with citizens taking to technology platforms to amplify their opinions and demand better services from governments. It’s playing a big role on the supply side as well with governments adopting e-government and making progress along the path to open government and turning Africa into an attractive place to live in and do business. Notable example include the Kenya Revenue Authority’s (KRA) Portal, Tanzania Revenue Authority e-Filing and mPayments, Rwanda Mobile-enabled Driving license applications and Liberia’s Online Company Registry. This economic and urban boom in cities like Lagos and Accra where existing public infrastructure systems -- from transportation, to water, sanitation, energy, healthcare, public safety, education and administration – is under increasing strain, technology could play a variety of roles to address these issues. Other areas to watch out for include electronic lands registries, integrated financial management systems and electronic business registration in an effort to improve service delivery in their government to government (G2G) interactions and G2C / G2B services. Of course the idea of cloud computing, big data and mobile technology will be interconnected areas of discourse in 2014.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter Tweet to @seunoyeniran

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Nigeria in 2014: e-Commerce will take centre stage

This is very related to the above point on Mobile payment and transactions. On 16th December 2013 German e-commerce incubator and cloning giant Rocket Internet, MTN, Africa’s largest cellphone operator and Stockholm-listed Millicom International Cellular partnered to develop internet e-commerce businesses in Africa through Africa Internet Holding (AIH), a vehicle to develop e-commerce businesses across the African continent (alongside partner Millicom International Cellular). They each took a 33.3% stake but the value was undisclosed. While still subject to regulatory approval, the parties expect the transaction to close during the second quarter of 2014. The implication for Nigeria? More transaction will be fulfilled online and there will be a radical change from the traditional brick and mortar shopping to shopping online as seen in developed countries. Businesses will have to respond by developing B2C and B2B enterprise architecture that will facilitate e-commerce. AIH has already developed a number of e-commerce ventures in the last 18 months, including Jumia, Zando, Kaymu, Jovago, Lamudi, Carmudi, EasyTaxi and Hellofood. The partnership is expected to capture the growth potential of the digital media space across footprints in the region.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter Tweet to @seunoyeniran

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Nigeria in 2014: Information technology (ICT), Social media and mobile device use will expand enforcing better governance

As Samsung gains leadership in the indian market, it is well positioned to become African leader in the mobile device market. In 2014 the battle between Apple and Samsung (for mobile device space) will have impact in the African market as Apple will strive to expand its market niche in the growing African economy. A Positive impact should of course be expected for Africa as this will not only bring in new products, prices should fall too. Africa is seen as a growing market when it comes to internet usage. According to the World Bank Africa Development Indicator 2012-13 report, of the 89-million recorded internet users in sub-Saharan Africa, half were in Nigeria. While only around 15.6% of Africans are online, infopreneuers, journalists, bloggers and the likes will take on social media in 2014 to utilize various platforms in sharing information and shining the light on injustices. A recent survey of 1000 university student found that 90% of them use Facebook. Twitter and other social media will witness higher use in Nigeria moving forward.

There are also a growing number of social entrepreneurs in Africa, who are utilizing their training and education to develop businesses and initiatives that tackle social challenges. Innovation hubs, incubators and accelerators are supporting entrepreneurs across the continent and are gradually attracting investors and corporate partners. Spaces supporting tech entrepreneurs, such as the Co-Creation Hub in Nigeria and iHub in Kenya, are creating jobs and improving the livelihoods of the poor. iCow, an application that provides timely agricultural information to dairy farmers in Kenya via SMS has reached almost 12,000 farmers and increased their income through elevated milk yields and decreased disease outbreaks.

Efiko, an application that enables students in Nigeria to test their knowledge of the school curriculum and compete with friends, has been played by thousands of senior secondary school students. Although most of these initiatives are at times criticized for being elitist, the applications springing up from them will definitely play impactful roles as we enter into 2014.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter Tweet to @seunoyeniran

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Mandela: He Chose The Opposite to Maintain Peace and Unity

“I have cherished the ideal of a democratic and free society in which all persons live together in harmony with equal opportunities. It is an ideal which I hope to live for, and to see realised. But, my Lord, if needs be, it is an ideal for which I am prepared to die.” -Nelson Mandela

Nelson Rolihlahla Mandela: 1918 - 2013

When Mandela was released in February 1990, even the apartheid government didn’t know what could follow. They let him go and prepared for the worse. Even his followers in the ACN expected that violence and forceful revenge will be in order. They were right to think so because even Mandela himself had gone for military training in Algeria in 1961 so that he can develop guerrilla tactics to combat the government of the day. Mandela did opposite of what the whole world expected. As The Telegraph's chief foreign correspondent David Blair reflects, not many people thought that South Africa could peacefully move from racial dictatorship to democracy without a civil war. Nelson Mandela was crucial to making that happen, allowing the black majority rule come in peacefully.

Spending 27 years in prison makes him the only single man who could have achieved peaceful transition to democracy; having spent such long years behind bars, no other black South African could question his commitment to the struggle to end apartheid. At the same time, no white South African could doubt that his gesture of reconciliation were heart felt. Nelson Mandela was the only man that could have carried out the extraordinary act of forgiveness that was required to burry apartheid and to do it with relatively little bloodshed. Living a tempestuous life, spending more than a decade as a hardened campaigner against apartheid, living mostly underground as he led strikes and demonstration of every kind leading to him being put on trial several times. He was part of a core of activist who opposed apartheid with everything they had from the late 1940s onward. "He was the only person who could have accomplished South Africa's transition to majority rule in a peaceful way, because of his own extraordinary life."

 Even till his late 90s and towards his death, South Africa clung to Mandela because he remains the link to their great triumph of a peaceful transition to democracy; seeing him more as a guarantor of their historic moment to democracy.

Nelson Rolihlahla Mandela: A life of Profound Humility

As I was thinking of what direction to take my writing of Mandela (because honestly, its really overwhelming to try and summarize the life of such an icon), then, I stumbled on this video of Oprah Winfrey interview Mandela in year 2000. Even if you are so unfamiliar with the historical events surrounding his life which culminated in his being locked in prison for 28years for his fight against apartheid, please watch this 4minutes 46seconds video below. This video shows Mandela's depth of humility, as he consistently focuses the attention on the people who strengthened him all through his time in prison and his drive for equality that has now transcended the globe.

Nelson Rolihlahla Mandela

"I hate race discrimination most intensely and in all its manifestations. I have fought it all during my life; I fight it now, and will do so until the end of my days." – Nelson Mandela

As the world paid their tribute to Nelson Mandela this week, I sat down in the corner of my room reflecting on the life of this man whose life has touched humanity so profoundly. Merely looking at the incredible list of guests who took their seats at his memorial service will amaze you! BBC News director, James Harding, defending the corporation's coverage of Mr Mandela regarded him as a man of "singular significance" and the "most significant statesman of the last 100 years". After carefully reading several articles written about him and watching a number of videos, including the short clips in this post (plus my little knowledge of historical events surrounding the life of Mandela), I conclude that Mr Harding is not exaggerating. As I reflect on the life of this man who brought an end to apartheid, a political system in South Africa from 1948 to the early 1990s that separated the different peoples living there and gave privileges to those of European origin, I felt a deep moral persuasion to write this particular article. I even feel more motivated to write knowing fully well that unborn children will come to this material later in future and will learn great wisdom from Mandela who (as US President Obama puts it) is "one of the most influential, courageous, and profoundly good human beings that any of us will share time with on this earth." Although a huge task, I try to capture the core lessons about his life; putting them in key headings (which I will have to break into multiple posts subsequently).

He saw problems and decided to be the answer to the call of many generations:

In 1939, Mandela enrolled at the University College of Fort Hare (considered Africa's equivalent of the University of Oxford or Harvard University), the only residential center of higher learning for blacks in South Africa at the time. Focusing on Roman Dutch law to prepare for a career in civil service as an interpreter or clerk (regarded as the best profession that a black man could obtain at the time), he was expelled from school in 1940 because as leader of Student Representative Council (SRC), because he aligned with students boycotts emanating from their dissatisfaction with the food and lack of power held by the SRC. He also later fled home in order to escape a forced marriage.

He settled in Johannesburg, where he worked a variety of jobs, including as a guard and a clerk, while completing his bachelor's degree via correspondence courses. He then enrolled at the University of Witwatersrand in Johannesburg to study law. It was from there he came into reality with apartheid: racial discrimination and a segregated political system where a political system in South Africa that separated the different peoples living there and gave privileges to those of European origin; and decided to do something about it. Mandela soon became actively involved in the anti-apartheid movement, joining the African National Congress (ANC) in 1942. Within the ANC, a small group of young Africans banded together, calling themselves the African National Congress Youth League. Their goal was to transform the ANC into a mass grassroots movement, deriving strength from millions of rural peasants and working people who had no voice under the current regime.

The National Party (NP) came to power in South Africa in 1948 on a political platform of white supremacy. The official policy of apartheid, or forced segregation of the races, began to be implemented under NP rule. Specifically, the group believed that the ANC's old tactics of polite petitioning were ineffective. In 1949, the ANC officially adopted the Youth League's methods of boycott, strike, civil disobedience and non-cooperation, with policy goals of full citizenship, redistribution of land, trade union rights, and free and compulsory education for all children. For 20 years, Mandela directed peaceful, nonviolent acts of defiance against the South African government and its racist policies. In 1952 the ANC staged a campaign known as the Defiance Campaign, when protesters across the country refused to obey apartheid laws. That same year Mandela became one of the ANC’s four deputy presidents. In 1952 he and his friend Oliver Tambo(a brilliant student he'd met while attending Fort Hare) were the first blacks to open a law practice in South Africa called Mandela and Tambo that provided free and low-cost legal counsel to unrepresented blacks. In 1955 led the Congress of the People. In the face of government harassment and with the prospect of the ANC being officially banned, Mandela and others devised a plan. Called the “M” plan after Mandela, it organized the ANC into small units of people who could then encourage grassroots participation in antiapartheid struggles.

In 1956, Mandela and 150 others were arrested and charged with treason for their political advocacy (they were eventually acquitted). Meanwhile, the ANC was being challenged by Africanists, a new breed of black activists who believed that the pacifist method of the ANC was ineffective. Africanists soon broke away to form the Pan-Africanist Congress (PAC), which negatively affected the ANC; by 1959, the movement had lost much of its militant support.

In March 1960 the ANC and its rival, the PAC, called for a nationwide demonstration against South Africa’s pass laws, which controlled the movement and employment of blacks and forced them to carry identity papers. After police massacred 69 blacks demonstrating in Sharpeville (see Sharpeville Massacre), both the ANC and the PAC were banned. After Sharpeville the ANC abandoned the strategy of nonviolence, which until that time had been an important part of its philosophy. Mandela, who was formerly committed to nonviolent protest, began to believe that armed struggle was the only way to achieve change. In December 1961, he co-founded Umkhonto we Sizwe (Spear of the Nation or simply MK), a military offshoot of the ANC dedicated to sabotage and guerilla war tactics to end apartheid. In 1961, Mandela also orchestrated a three-day national workers' strike. He was named its commander-in-chief of MK and went to Algeria for military training. Back in South Africa, he was arrested in August 1962 for leading the strike and sentenced to five years in prison including being charged for incitement and leaving the country illegally. In 1963, Mandela was brought to trial again. This time, he and 10 other ANC leaders were sentenced to life imprisonment for political offenses, including sabotage.

Nelson Mandela was incarcerated on Robben Island for 18 of his 27 years in prison. During this time, he contracted tuberculosis and, as a black political prisoner, received the lowest level of treatment from prison workers. However, while incarcerated, Mandela was able to earn a Bachelor of Law degree through a University of London correspondence program. Despite the maximum security of the Robben Island prison, Mandela and other ANC leaders were able to keep in contact with the antiapartheid movement covertly. Mandela wrote much of his autobiography, Long Walk to Freedom, secretly in prison.

Later, Mandela was moved to the maximum-security Pollsmoor Prison near Cape Town. A 1981 memoir by South African intelligence agent Gordon Winter described a plot by the South African apartheid government to arrange for Mandela's escape so as to shoot him during the recapture; the plot was foiled by British intelligence. Mandela became an international symbol of resistance to apartheid during his long years of imprisonment, and world leaders continued to demand his release. He continued to be such a potent symbol of black resistance that a coordinated international campaign for his release was launched, and this international groundswell of support exemplified the power and esteem that Mandela had in the global political community.

In response to both international and domestic pressure, the South African government, under the leadership of President F. W. de Klerk, lifted the ban against the ANC and released Mandela in February 1990.

Mandela, who enjoyed enormous popularity, assumed the leadership of the ANC and led negotiations with the government for an end to apartheid. While white South Africans considered sharing power a big step, black South Africans wanted nothing less than a complete transfer of power. Mandela played a crucial role in resolving differences. For their efforts, he and de Klerk were awarded the Nobel Peace Prize in 1993. In 1994 South Africa held its first multiracial elections, and Mandela became president.

Mandela sought to calm the fears of white South Africans and of potential international investors by trying to balance plans for reconstruction and development with financial caution. His Reconstruction and Development Plan allotted large amounts of money to the creation of jobs and housing and to the development of basic health care. In December 1996 Mandela signed into law a new South African constitution. The constitution established a federal system with a strong central government based on majority rule, and it contained guarantees of the rights of minorities and of freedom of expression. Mandela, who had announced that he would not run for reelection in 1999, stepped down as party leader of the ANC in late 1997 and was succeeded by South African deputy president Thabo Mbeki. Mandela's presidency came to an end in June 1999, when the ANC won legislative elections and selected Mbeki as South Africa's next president. 

As I continue my writing in this series, I will like to hear from you too. I just finished listening to former and present UN Secretary General talk about his humility and call him their mentor. What about is feable, human side? What have you leant from the life of Mandela? Some Christians are even asking: will he make heaven? You can drop a line below or chat with me on twitter: Tweet to @seunoyeniran

Nelson Mandela. (2013). The Biography Channel website. Retrieved 12:33, Dec 12, 2013, from http://www.biography.com/people/nelson-mandela-9397017

Microsoft ® Encarta ® 2008. © 1993-2007 Microsoft Corporation. All rights reserved.

"Nelson Mandela the orator: his most powerful speeches." The Telegraph. Telegraph Media Group, 1 Dec. 2006. Web. 12 Dec. 2013. http://www.telegraph.co.uk/news/worldnews/nelson-mandela/10139739/Nelson-Mandela-the-orator-his-most-powerful-speeches.html

"Mandela: Icon, Hero and Flawed Human." Mandela - ABC News. ABC News Internet Ventures, 7 Dec. 2013. Web. 7 Dec. 2013. http://abcnews.go.com/International/wireStory/mandela-icon-hero-flawed-human-21134352?singlePage=true

"A Who's Who of world leaders: The incredible list of guests who took their seats at Nelson Mandela's memorial service." Mail Online. N.p., 12 Dec. 2013. Web. 12 Dec. 2013. http://www.dailymail.co.uk/news/article-2521202/Nelson-Mandelas-memorial-service-whos-world-leaders.html

"Read Obama's complete speech at Nelson Mandela memorial." The Globe and Mail. N.p., 12 Oct. 2013. Web. 12 Dec. 2013. http://www.theglobeandmail.com/news/world/read-obamas-complete-speech-at-nelson-mandela-memorial/article15850924/

"Mandela’s struggle was personal inspiration: Obama." The Daily Star. N.p., n.d. Web. 12 Dec. 2013. http://www.thedailystar.net/beta2/news/mandelas-struggle-was-personal-inspiration-obama/

"My life with Mandela –Obasanjo." The Punch Nigerias Most Widely Read Newspaper. N.p., 7 Dec. 2013. Web. 12 Dec. 2013. http://www.punchng.com/news/my-life-with-mandela-obasanjo/

"Desmond Tutu's tribute to Mandela's magnanimityAdd to ...." The Globe and Mail. N.p., n.d. Web. 12 Dec. 2013.

"World leaders pay tribute to Mandela." - Africa. N.p., n.d. Web. 12 Dec. 2013. http://www.aljazeera.com/news/africa/2013/12/world-leaders-bid-farewell-mandela-20131210134926782841.html

"BBC receives 1,350 complaints for 'excessive' Mandela coverage, including some viewers angry at interruption of 'Mrs Brown's Boys'." The Independent. Independent Digital News and Media, 12 Dec. 2013. Web. 12 Dec. 2013.http://www.independent.co.uk/news/media/tv-radio/bbc-receives-1350-complaints-for-excessive-mandela-coverage-including-some-viewers-angry-at-interruption-of-mrs-browns-boys-8993369.html