Rwanda : Money transfer high charges no longer a problem in Rwanda- Central Bank
Rwanda Central Bank has challenged a report that United Nations Conference on Trade and Development (UNCTAD) released, which indicates that costs in LDCs are as high as 20 per cent of the amount transferred which is about a third more than the global average. Ambassador Claver Gatete, the Rwanda Central Bank Governor did not rule out the concern in the region but insists it is not the case in Rwanda.
The UNCTAD report titled “Harnessing Remittances and Diaspora Knowledge to build Productive Capacities” was released earlier this week and raises concerns of high remittances costs over the whole African continent and especially in this East African region where Rwanda belongs.
The report says; “Remittances are significant private financial resources for households in countries of origin stressing the need for further efforts to lower the transaction costs of remittances and to create opportunities for development oriented investments,” Andrew Mold, an official with the UN Economic Commission for Africa (UNECA) sub-regional office for eastern African, said at the launch of the report.
The East African region is among the places of the least developed countries where remittances costs are high. Rwanda is one of those countries whereby money transfer costs hinder remittances. The report details show that the money transfer cost between Rwanda and Tanzania is 23percent, Rwanda and Canada 14percent, Rwanda and UK 13percent and Rwanda and Kenya 10percent.
The Rwanda Central Bank Governor Claver Gatete said however, the money transfer costs is no longer an issue in Rwanda after the augmentation of money transfer companies and the cut of charges by the receiving company.
“We used to have only two money transfer companies. They increased and are now thirteen which significantly reduced the transfer costs. Another step that boosted the cots’ reduction was the cut of money transfer charges by those receiving companies. So that concern is no longer there and we are witnessing a significant increase of remittances”. Gatete noted.
Nevertheless, according to financial experts, remittances are considered a significant source of external financing for LDCs and should be mobilized for expansion and diversification of productive capacities among the countries.
The UNCTAD report advises all the Governments of the Least Developed Countries (LDCs) to embark on a reduction of transfer costs of remittances if money sent home by their nationals in the Diaspora is to make an impact on their economies, a new report has said.
The report further shows that remittances to LDCs grew from $3.5 billion in 1990 to $27 billion in 2011. The increase was accelerated by the rise in the number of emigrants from 19 million in 2000 to 27 million in 2010.
The Rwanda Central Bank plans to unveil the total remittances of this year in December, whereby it says the increase is significant. Recent statistics in Rwanda indicate that remittances from Rwandans living abroad reached $80 million within the first six months of the year.
Rwandans in Diaspora have always been active in participating in development programmes back home with the most recent one being the Agaciro Development Fund, a solidarity fund initiated to improve the level of financial autonomy of the country.
They also contribute through other different projects led by Migration for the Development of Africa (MIDA) which is now one of the Ministry of Foreign affairs departments.