The study which was released last month said remittances make up 20 percent of The Gambia’s Gross Domestic Product (GDP) thus suggesting that its (remittances) slowdown may affect how the country fares economically this year.
“The growth of remittance flows to the region (Sub-Saharan Countries) is projected to slow to 0.9percent in 2015, and then recover to 3.4 and 3.8 percent in 2016 and 2017,” it stated.
“The level of remittance dependency varies across countries. Remittances in The Gambia, Lesotho, Liberia and Comoros equal about 20 percent of GDP. Remittances also finance a substantial share of imports in some of the larger countries; for example, remittances financed one-third of imports in Nigeria in 2013…The positive impact on flows of a robust recovery in the US will be partially offset by continued weakness in Europe, the impact of lower oil prices on the Russian economy, the strengthening of the US dollar, and tighter immigration controls in many source countries for remittances. Remittance flows are expected to recover in 2016 to reach $479 billion by 2017, in line with the more positive global economic outlook.”
However, Gambians and others, as revealed by the study, also have the highest costs of sending remittances home in the last quarter of 2014, at 11.5 percent to send $200, against an average global rate of 8 percent, and double the cost of sending money to South Asia.
Technology such as online and mobile money transfers is one way of reducing this, the study noted, but its growth has been hampered by regulation on fears of money laundering.
Internationally, the migrant stock is expected to breach 250 million this year, in part driven by conflicts.
Globally, $426 billion was sent as remittances, affected by factors such as a weak euro area, lower oil prices and exchange rate effects as the depreciation of the euro reduced the dollar value of remittances.
“The global average cost for sending money remained broadly at 8 percent in the fourth quarter of 2014, with the highest average cost (about 12 percent) in Sub-Saharan Africa. Concerns over money laundering are keeping costs high by increasing compliance costs for commercial banks and money transfer operators, and delaying the entry of new players and the use of mobile technology,” the report further said.
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