What your dollars are doing: remittances make a difference!

Doorway into the family compound at DadaK’s village in Ghana.

While money can cause problems in all relationships, there’s a particular twist in relationships where one partner is from a lower income country.

As a committee member for Australian African Network (AAN), a group for people in mixed relationships & families, I’m regularly approached by non-African partners who are worried because they feel their partner is sending a lot of money back to family in Africa (techincally known as remittances).

Their main concerns are whether or not their African partner’s families’ requests – or ‘demands’ – for money are genuine and reasonable; and that the out-flow of money is at the expense of their own families here.

The first thing I say to them is that they are not alone – this is a really common problem – and it’s really important to figure out how to balance everyone’s needs.

All the people interviewed for Working it Out (a booklet on mixed relationships I edited for AAN in 2009) were very aware that money issues posed a potential threat to their relationship. For some, conflicts around money lead to separation. Others had figured out how to manage it – usually when the African partner had decided to place a very firm limit on how much they sent home each month (this is easier said than done of course), or the non-African partner was in a strong enough financial position that they could cope with the level of money being sent to African relatives.

I’m lucky enough to have been in the latter category. It actually took a while to dawn on me just how much money DadaK was sending back, because we always kept our finances separate and split the bills. The main impact was that I paid a bit more rent than he did because I didn’t want to compromise on the quality of our home, whereas his priority was to live as cheaply as possible so he could send more money to his family. I had a well-paid job, so this was (mostly) manageable, but not everyone is so lucky, and remittances can be a big drain on the family budget, especially now that the cost of living is increasing so much.

Although I’ve been able to continue to help out financially at times since our separation, I think the greatest impact on me has been the distress I feel due to the extreme differences in the standards of living of my Ghanaian in-laws and my Australian family.

Perhaps it’s more common among those of use who’ve been to Africa, but I know other Aussie partners share this distress – even despair. You know how great the need is, when you have in-laws living in poverty, and you know you can never help everyone.

One of the women I interviewed for Working it Out captured this feeling when she said: ‘I’d like to send the kids to school so they have half a chance of being able to support themselves, but I can’t support 30 kids!’

It can feel that as an individual you can never make a difference, especially when you and your partner are so far from where the money is being spent and – of course – cannot really control what’s done with it. For years I watched DadaK sending money to Africa to relatives who either ‘mis-used’ the momey (i.e., had quite different priorities, to him, as to how it should be spent), or else messed up on projects that he’d hoped would make them more independent of him – like crashing the taxi he’d bought, or letting his cattle graze on the rubbish dump, where they died from eating plastic bags.

In spite of all the various disasters, several of DadaK’s siblings have managed to put at least some of their kids through high school, which is basically thanks to his remittances. I think that’s a pretty good outcome. And that is really the moral of this post, (which I am now going to back up with some data released last year by the World Bank): Remittances do make a difference.

Leveraging Migration for Africa: Remittances, Skills, and Investments, has a whole chapter on the impact of remittances in Africa. This report from the World Bank states that Africa received around $40 billion in remittances in 2010; equivalent to 2.6% of Africa’s gross domestic product and the continent’s biggest income stream after foreign investment. In fact, the report suggests, this figure is probably a serious under-estimate and the value of remittances could easily be more than $80 billion.

According to the report, remittances make African countries more ‘credit-worthy’, encourage investment, and are more stable than other sources of income because they remain fairly steady (even during the GFC) and may even increase during periods of crisis when other income from trade and investment declines. In general, they appear to contribute to the growth of African economies.

Remittances are also ‘associated with reductions in poverty … improved health and education outcomes … and act as a form of insurance for households facing shocks to their income and livelihood caused by drought, famine and other natural disasters.’

As remittances have quadrupled in volume in the past 20 years (due to increased migration), it seems to me that these benefits are likely to also increase. In the long run, remittances may help alleviate poverty and level the global playing field for Africa – and your dollars are helping to make that happen! Now that’s what I call an investment.

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One thought on “What your dollars are doing: remittances make a difference!

  1. Pingback: Monday Music: Ghana old school | Border Crossings

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