Remittances to Rwanda still low World Bank
Rwanda needs to attract more money from nationals living and working abroad to help accelerate development, according to the World Bank’s latest report on the country’s economic update.
The report, which was released this week, states that remittances to the East African Community (EAC) account for 13 per cent of the total remittances in Sub Saharan Africa and less than 1 per cent of the global remittances. Rwanda accounted for only 3.2 per cent of the total remittances in EAC.
“I presume Rwanda is lacking investment opportunities for the Diaspora,” said Birgit Hansl, a Senior Economist in charge of Economic Policy and Poverty Reduction, Africa Region.
“I am sure Rwandans are banking huge amounts in European banks ,especially in Belgium because they are not on, ground to know better areas for investments,” she said.
While remittances to Rwanda have been steadily growing over the past years, Hansl said that in order to attract more remittances the country should present opportunities in energy and infrastructure sectors.
Last year, Rwandans in the Diaspora sent in more money home compared to the previous year. Total remittances to the country increased by 69.2 per cent to $166.2 million in 2011 compared to $98.21 million collected in 2010.
Kenya and Uganda were the main destination countries for remittances within the EAC averaging more than 95 per cent of total inflows, the report says.
Rwanda plans to issue Disapora bond to raise money to finance development as well as increasing the treasury’s ability to tap into diaspora resources.
Amb. Claver Gatete, Governor National Bank of Rwanda, said during presentation of monetary policy and financial stability statement this week that preparations are underway to issue the Diaspora bond.
Gatete said they intend to borrow a leaf from countries where the facility has been successful like Kenya, Ethiopia and Bangladesh in an attempt to identify and replicate the structure that would suit the country.
In the report it was also noted that during the period under review, Foreign Direct Investment in the region was at 6 per cent of total FDI in Sub Saharan Africa and less than 1 per cent of global FDI.
Tanzania and Uganda were main recipients of regional FDI averaging to more than 85 per cent.
According to the report, Tanzania recorded 51.9, Uganda 34.9, Kenya 8.7, Rwanda 4.4 while Burundi registered 0.1 per cent of FDI.