In terms of volume and value of remittance flows to SSA, evidence from available data show that no sub-region in SSA is left out from remittance flows. However, the West and East African sub-regions dominate in terms of concentration of remittance inflows while Central and Southern African sub- regions are barely represented with two and three countries respectively reporting data on remittances for most of the periods covered in this study.
Details of volume and value of remittance flows to SSA by sub-region and by country are presented in Table 2.6.
36 An effort to determine how much of remittance flows can be associated with productive activities or economic growth in recipient economies of SSA necessarily begins with the identification of top remittance recipients from the Table 2.6: Volume and Value of Remittance Flows to SSA by Sub-Region and by Country Sub-region
and Country
Remittances Sub-region and Country
Remittances
US$ million % of GDP US$ million % of GDP
2000 2006 2000 2006 2000 2006 2000 2006
Eastern Africa Western Africa
Burundi Benin* 80.48 186.19 3.57 4.03
Comoros Burkina Faso 62.47 2.39
Djibouti* 0.72 3.66 0.13 0.48 Cape Verde* 85.69 135.83 16.13 11.30
Eritrea Cote d‘Ivoire
Ethiopia* 53.16 169.18 0.65 1.12 Gambia 62.87 12.38
Kenya* 584.85 570.46 4.61 2.54 Ghana* 32.40 105.25 0.65 0.83
Madagascar Guinea* 1.17 41.64 0.04 1.30
Malawi* 3.62 17.17 0.21 0.54 Guinea Bissau
Mauritius Liberia
Mozambique 15.83 0.22 Mali* 69.18 192.73 2.86 3.29 Rwanda 3.62 17.17 0.21 0.61 Niger* 4.55 49.06 0.25 1.35 Seychelles* 2.98 13.08 0.49 1.35 Nigeria* 1391.79 3328.69 3.03 2.27
Somalia Senegal* 179.2
2
850.58 3.82 9.08 Uganda* 238.10 411.00 3.84 4.13 Sierra
Leone*
7.13 47.35 1.12 3.33
Tanzania 8.99 0.06 Togo* 15.71 199.95 1.18 9.01
Central Africa Southern Africa
Cameroon* 11.85 117.65 0.12 0.66 Angola CA
Republic
Botswana* 0.35 78.74 0.01 0.72
Chad Lesotho* 0.14 4.46 0.02 0.29
DR Congo Namibia* 4.49 6.54 0.11 0.08
Eq. Guinea South Africa
Gabon* 2.26 1.48 0.04 0.02 Swaziland São Tomé
and Príncipe
Zambia Zimbabwe
Source: Author‘s Computations based on Data from Africa Development Indicators online, 2010
*indicate countries included in this study
37 four sub-regional blocks in SSA. Available data reveal that Nigeria tops in the West African sub-region, Kenya tops in East Africa; Botswana tops the list in Southern Africa sub-region and Cameroon occupies that position in the central Africa sub-region. An annual classification (covering the study period, 2000 - 2007) of remittances and other major growth indicators for the identified top remittance recipients are presented in Table 2.7.
38
Table 2.7: Major Growth Indicators of Sub-Regional Top Remittance Recipients in SSA (US$‘Million)
Country year GDP INV REB WR
Nigeria (West Africa)
2000 45983.6 9317.43 10092.99 1391.79 2001 47999.78 11563.31 5138.631 1166.628 2002 59116.85 12249.57 -405.57 1208.94 2003 67656.02 13910.33 1530.907 1062.84 2004 87845.42 16261.06 11326.93 2272.701 2005 112248.6 21071.68 17388.16 3328.694 2006 146869 25370.21 22123.33 3328.694 2007 165920.9 25370.21 17424.52 17945.94 Kenya
(East Africa)
2000 12691.28 2210.071 -1286.12 584.8543 2001 12986.52 2440.211 -1309.52 50.91443 2002 13149.26 1990.564 -707 57.14348 2003 14903.63 2456.439 -888.053 65.8453 2004 16091.63 2750.309 -1007.05 375.8113 2005 18769.01 3169.203 -1398 424.991 2006 22478.65 4038.904 -2223 570.4593 2007 26950.31 5437.966 -3022 645.1811 Botswana
(Southern Africa)
2000 6177.184 2160.083 1169.572 0.352816 2001 6033.253 2397.494 975.1013 0.359518 2002 5933.281 2416.915 681.4528 0.015803 2003 8277.572 3455.007 717.251 0.022223 2004 9827.417 4007.657 976.8438 50.82159 2005 10512.51 3699.524 1811.447 82.35632 2006 11006.46 3299.392 2471.827 78.74315 2007 12323.81 5010.711 1284.973 80.0393 Cameroon
(Central Africa)
2000 10075.04 1684.636 361.8344 11.84716 2001 9598.224 1949.526 -124.231 6.78832 2002 10879.78 2153.019 -85.2043 14.14916 2003 13621.81 2383.246 44.62519 60.55743 2004 15775.36 2983.054 -67.8614 98.38632 2005 16587.86 3163.024 -168.54 67.12822 2006 17956.99 3019.452 368.2258 117.648 2007 20691.56 3582.002 168.3954 154.0269
Source: World Bank, Africa Development Indicators online, 2010
39 An inspection of data in Table 2.7 reveals a steady rise in values of all variables observed between 2000 and 2007. The only exception here has to do with data on the variable - external balance which have mixed signs across periods and countries. The observed relationships are further captured in separate figures below for each of the top remittance recipients. This is to allow for additional insights regarding the existence of any unique characterization of remittance flows into SSA.
Figure 2.2: Remittance Receipts and other Growth Indicators in Nigeria (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010
The volume of remittance flows to Nigeria continued to remain below the investment and aggregate output (GDP) curves throughout the period under review. However, remittances to Nigeria remained in the positive region and
-20 0 20 40 60 80 100 120 140 160 180
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP Investment External Balance Remittances
40 exhibited an upward trend over time. Remittances flow to Nigeria continued to grow as GDP and domestic investment rises. This pattern is particularly so from the period 2004 and 2007. External balance, which captures the external trade sector, failed to demonstrate a similar relationship with the other variables over time. What is observed with this variable is a pattern of cycles the investment and remittance curves throughout the study period.
The same set of variables is examined below in Figure 2.3 for Kenya which represents the east African region. This is to verify whether a similar pattern of behaviour exists among the four sub-regions.
Figure 2.3: Remittance Receipts and other Growth Indicators in Kenya (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010 -5
0 5 10 15 20 25 30
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP Investment External Balance Remittances
41 Relationships among the variables GDP, domestic investment, external balance and remittance receipts for Kenya between 2000 and 2007 are shown in figure 2.3. One major contrasting observation in the figure from the case of Nigeria is the behaviour of the variable, external balance which remained predominantly in the negative region and maintains a downward trend throughout the study period.
Remittances remain in the positive region throughout the study period but with some downward trend observed between 2000 and 2003. Remittances however rose sustainably between 2003 and 2007. Investment and GDP on the average remained positive and upward sloping. One very interesting pattern noticed here is the period 2003 upward. GDP, investment and remittances all exhibited very similar swings during this period. This behaviour is quite similar to what was noticed in the case of Nigeria. But can a similar relationship hold for Botswana in southern Africa? Figure 2.4 below reveals the answer.
42 Figure 2.4: Remittance Receipts and other Growth Indicators in Botswana (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010 The case of Botswana appears quite interesting with all variables exhibiting a marked difference from the case Kenya. Here, none of the variables appeared in the negative region. Of particular note is the variable external balance which is substantially positively sloped contrasting sharply the cases of Nigeria and Kenya. This is indicative of a relatively healthy economy. While GDP, investment and external balance on the average, grew in the same upward direction from 2002, the variable external balance started fading in the downward direction from the period 2006. Remittances inflow though positive, remained minimal slightly rising above the horizontal axis from throughout the study period. Cameroon in central Africa is next examined below in figure 2.6.
0 2 4 6 8 10 12 14
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP Investment External Balance Remittances
43 Figure 2.5: Remittance Receipts and other Growth Indicators in Cameroon (2000 – 2007)
Source: Plotted by author based on data from African Development Indicator, Online, 2010
The average pattern in the case of Cameroon is again different from the other three top remittance recipients in SSA. While GDP and investment curves are continuously upward sloping from the period 2001, remittances curve averages out the eternal balance curve. Although both curves remained substantially in the positive region, both were barely above the horizontal axis indicating a rather negligible value for these variables. The remittances curve interestingly is very similar to the case of Botswana which was stable throughout the period under review around the horizontal axis meaning that inflows are minimal.
-5 0 5 10 15 20 25
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP Investment External Balance Remittances
44 It is also compelling at this juncture to consider the least remittance recipients from each of the SSA sub-regions in order to obtain a more balanced and fair picture. The overall idea here is to probe for the presence of similar characterizations of remittance flows to SSA among these least remittance recipients. Data on major growth indicators and remittances for the four least remittance recipients are presented in Table 2.8.
45 Table 2.8: Growth Indicators of least Sub-Regional Remittance
Recipients in SSA (US$‘Million)
Country year GDP INV REB WR
Guinea (West Africa)
2000 3112.363 613.2339 -132.777 1.166455 2001 3039.157 468.2449 -40.5415 8.71587 2002 3208.305 431.5194 -127.189 15.16 2003 3619.436 368.5984 -85.68 111.046 2004 3938.328 447.3895 -156.784 41.64 2005 3260.598 458.0511 -88.4114 41.64 2006 3203.923 427.4501 -89.4554 41.64 2007 4563.586 575.8159 -102.179 15.07
Djibouti (East Africa)
2000 551.2309 48.45854 -84.4807 0.72023 2001 572.4174 45.0487 -48.5199 0.708976 2002 591.122 59.40604 -30.6098 0.787752 2003 622.0447 89.6557 -56.9657 2.909054 2004 666.0721 143.2864 -114.553 2.970949 2005 708.8436 134.4804 -73.2384 2.993456 2006 760.6529 227.2663 -134.115 3.657418 2007 817.6805 317.8634 -170.104 3.544882
Lesotho (Southern
Africa)
2000 783.1093 395.5415 -515.861 0.138586 2001 711.0866 325.8268 -405.828 1.300182 2002 669.718 300.0478 -418.334 9.772631 2003 994.2572 323.4153 -552.491 11.46537 2004 1289.785 404.1968 -629.386 14.37744 2005 1375.998 401.0849 -707.811 6.948424 2006 1517.512 378.1838 -703.336 4.461993 2007 1669.564 442.8817 -832.964 12.87145
Gabon (Central
Africa)
2000 5067.839 1109.961 1842.789 2.258502 2001 4712.84 1211.642 1224.853 1.23868 2002 4931.504 1208.803 947.9257 1.156404 2003 6054.886 1450.454 1468.341 3.805917 2004 7178.136 1750.973 2166.439 1.431046 2005 8665.739 1846.705 3209.592 1.478762 2006 9545.985 2340.1 3135.111 1.478762 2007 11567.59 3028.015 3333.316 1.478762
Source: World Bank, Africa Development Indicators online, 2010
46 For the purpose of providing additional insight, data covering the study period (2000-2007), on all variables and for each of the four countries listed in Table 2.8 are plotted in the figures below as was done earlier on, in the cases of top remittance recipients. These figures are presented and discussed in turn.
Figure 2.6: Remittance Receipts and other Growth Indicators in Guinea (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010
GDP trend for Guinea in West Africa follows a cyclical pattern in the period under review while domestic investment and external balance curves, although in the positive region are slightly negatively sloped. External balance curve is completely in the negative region meaning that this country was never able to meet its trading obligations to her trading partners during the period under
-1 0 1 2 3 4 5
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP INV REB WR
47 review. Remittances flow is stable, positive and minimal around the horizontal axis. Djibouti in East Africa is considered in figure 2.7 below. Again the goal here is to examine whether behaviour similar to those of Guinea is exhibited.
Figure 2.7: Remittance Receipts and other Growth Indicators in Djibouti (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010
Evidence from Djibouti reveals that GDP and domestic investment exhibited upward trend from 2000 up until 2007. Remittances again remained stable around the horizontal axis demonstrating little or no improvement over time. External balance variable is disturbingly in the negative region and negative sloping all through the
-0.4 -0.2 0 0.2 0.4 0.6 0.8 1
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP INV REB WR
48 period of the review again indicating the inability of this country to settle its trading obligations with her trading partners. What is rather striking in these behaviours is the extremely weak nature of these least remittance recipients as revealed by their negative external balances. What remains is to see whether Lesotho and Gabon will also exhibit similar behavioural patterns. Figure 2.8 reveals the case of Lesotho.
Figure 2.8: Remittance Receipts and other Growth Indicators in Lesotho (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010
Apart from GDP and investment which are largely in the positive region and upward sloping, the other growth indicators for Lesotho are most unimpressive as shown in
-1 -0.5 0 0.5 1 1.5 2
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP INV REB WR
49 figure 2.8. The variable - eternal balance exhibited predominantly downward trends and remained in the negative region throughout the study period. One surprising observation is the fact that the period of GDP and investment growth (2002) unfortunately coincides with the period of further decline in external balance meaning that the observed growth in GDP and investment did not translate into a healthy foreign trade sector. The negative values observed for the variable - external balance further add to the curiosity on whether any systematic link exists between a weak foreign trade sector and low remittance inflows. An examination of the case of Gabon in figure 2.9 below will shed more light on these relationships.
Figure 2.9: Remittance Receipts and other Growth Indicators in Gabon (2000 – 2007)
Source: Plotted by author based on data from African Development Online, 2010 0
2 4 6 8 10 12 14
2000 2001 2002 2003 2004 2005 2006 2007
US$'Billions
GDP INV REB WR
50 All growth indicators for Gabon exhibit a more impressive pattern of behaviour than the other three least remittance recipient economies in SSA. As can be seen, these variables including remittances are in the positive region. GDP, investment, and external balance clearly demonstrate upward trends on the average and this is indicative of a much more healthy economy than the other three least remittance recipient economies of SSA. Remittances itself though positive and stable around the horizontal axis is quite minimal. The evidence provided by data on Gabon makes the exact nature of relationship among remittances and growth indicators included in this study rather unclear and inconclusive. This therefore calls for further investigation.
51 CHAPTER THREE