Remittances, Africa and the effects of the Financial Crisis

In a recently published Working Paper “The Global Financial Crisis and Workers’ Remittances to Africa: What’s the Damage?” Adolfo Barajas, Ralph Chami, Connel Fullenkamp, and Anjali Garg estimate the impact of the global economic crisis on African GDP via the remittance channel during 2009-2010. The data and it’s interpretation forecasts remittance declines into African countries of between 3 and 14 percentage points, with migrants to Europe hardest hit while migrants within Africa relatively unaffected by the crisis. The estimated impact on GDP for relatively remittance-dependent countries is 2 percent for 2009, but will likely be short-lived, as host country income is projected to rise in 2010.

The paper is available for download at http://www.imf.org/external/pubs/ft/wp/2010/wp1024.pdf