Remittances from abroad to Ethiopia jump by $2 billion

(EBC, January 3, 2016)-Remittances to Ethiopians from abroad increased sharply in 2015, up by about $2 billion to reach $3.7 billion from $1.5 billion in 2014, according to the Ethiopian Ministry for Foreign Affairs.

"The 88 percent jump in remittances from the 2 million Ethiopians abroad is a phenomenal increase," ministry spokesman Tewolde Mulugeta said. About 44 percent of the $3.7 billion came from North America.

The flow of diaspora money is facilitated by certified global service providers. There are 66 service providers working with 18 private and state banks, according to data from the National Bank of Ethiopia.

But many Ethiopians receive remittances through irregular channels, endangering their chances of ever getting the money.

Mekonnen Taye, 34, whose family lives on remittances sent from two of his brothers who migrated to South Africa, has already received his money this year.

 "They sometimes send the money through people coming back home," he said. "In most cases, we receive it from individuals acting like banks."

Abebe Tsegaye, a lecturer at Addis Ababa University, said on Friday: "Many people are forced to use irregular means to send remittances."

"The irregular channels have many disadvantages. The money can disappear somewhere in the middle, or it may be delayed," he said.

"Some choose to send money via irregular channels because the fixed exchange rate is always a bit lower than the black market value," he added.

Abebe said social obligations to support the family have contributed to the growth of remittances. "Economic conditions outside of Ethiopia have also permitted Ethiopians abroad to send more," he added.

According to Tewolde, diaspora population has a massive investment in Ethiopia.

 Tewolde credited "effective" government policies as encouraging the growth in remittances.

"The Ethiopian economy is growing at 11 percent per year, making it one of the world's fastest growing economies in the world," he said.

"This has motivated the Ethiopian diaspora to invest at home and to transfer knowledge and skills," he said.

"Remittances support the development activities of the country," Tewolde said.

Ethiopia is building infrastructure like roads, railways, power plants and factories.

According to the World Bank, Ethiopia's remittances will increase a further 50 percent over the next three years, the spokesman said.

Source: Anadolu Agency