The drop in money transferr ed by immigrants to their home countries due to the global financial crisis will have a drastic impact on efforts aiming at combating poverty, more particularly in Africa, according to the director, Africa Division at the United Nations Conference on Trade and Development (UNCTAD).
“In Africa, 70% of funds transferred are meant for consumption and only 10% for investments, hence the key role they play in combating poverty,” Mr. Ouane told PANA in an interview.
According to estimates by the World Bank and the Organization for Economic Coope ration and Development (OECD), money transferred by immigrants will record a 7-10 per cent drop in 2009 .
“Populations see these transfers as a security net and reduced financial flows m ight be extremely regrettable,” Mr. Ouane said.
He said in addition to the drop in money transfer, the prices of commodities exp orted by African nations have fallen on the international market.
The UNCTAD official said these problems, coupled with the reduction in Foreign D irect Investments in Africa, would result in the reduction of resources meant for fight against poverty.
Money transferred by immigrants outstrip the volume of public aid for developmen t in some countries, including the Comoros, Mali and Senegal.
On the initiative of the African Development Bank (AfDB), a debate has started o n how the funds transferred to Africa can be transformed into direct investments in profitable sectors.