AFRICA-EU STRATEGIC PARTNERSHIP SENIOR OFFICIALS MEETING (SOM), BRUSSELS, SEPTEMBER 2010 AFRICAN INSTITUTE REMITTANCE PROJECT African Union Commission

ARI Project: Context Recent African Diaspora in Europe: 3.3 millions of whom 1.000,000 from SSA Recent African Diaspora in USA: 1.000,000 Recent African Diaspora in Canada: 300,000 Remittances from EU27 (2004): 26,8 billions Euros from which 12% 93,2 bn) to SSA Recorded remittances to Africa: $10-40 bn, representing significant proportion of GDP (25% for Liberia,) : exceed several total FDI and assistance in many African countries Main remitting EU States: UK, France, Italy, Germany, Spain, Netherlands and Belgium

Conventional practices still prevailing in Africa: Immediate recipient household consumption needs: education & health services, SMME financing, community infrastructures (roads, water supply, etc) Innovative & creative measures uses of remittances in Latin American Countries as development tools and instruments, enhance the development impact on poverty reduction

ARI Project: Background Migration Policy Framework for Africa Joint Africa-EU Declaration on Migration and Development Ministerial Conference of Least developed Countries on Enhancing Development Impact of Remittances (cotonou) Lisbon Summit Action Plan and Africa EU- Strategic Partnership

ARI Project: the challenges and constraints to leveraging remittances to boost development efforts Low levels of domestic financial development including lack of access to finance in rural areas High cost of investment banking and absence of credit rating services Inadequate regulatory capacity and lack of transparency and competition in remittances services contributing to high-cost of remittance transfers Inadequate financial and institutional support for the effective use of remittances and other Diaspora resources for Africa development

Opportunities African Union willing to seize the opportunity to:  Maximize the development effects of remittances And  Improve remittances transfer mechanisms

African Institute Remittance Essential of the Core Objective:  Capacity building of MS of the AU, remittances senders and recipients, private sector, universities and other stakeholders to develop and implement concrete strategies and operational instruments to use remittances as development tools for poverty reduction  Strengthening partnership between key stakeholders the AU, WB, IOM, ADB,UNECA and African Diaspora in the areas of remittances in particular and development in general

ARI: Outcomes Devising policies to create an enabling institutional policy environment and regulatory frameworks Improved methodologies for recording and analysis of remittances and migration data Proposed regulated frameworks and encourage competition to achieve reduction in transfer costs Diaspora bonds, remittances securitized for credit/loans access from global financial markets Remittance-based Investment Fund established and accessed by stakeholders

ARI: Estimated Results 1.ARI created and has operational networks in stakeholders and beneficiary organizations 2.Governements in remittance receiving countries sharpen development impact of remittances through application of appropriate policies 3.Improved financial access and banking products/services for remittance senders and recipients 4.Regulatory regimes preventing financial abuse and facilitating remittance flow thru formal channels established

ARI: Estimated Results: Cont… 5. Dissemination of data on remittance fees in major corridors improved 6. Remittance transaction costs reduced 7. Voluntary code of conduct for delivering fair value transfers implemented 8. New regulations and instruments for the Diaspora developed 9. Diaspora bonds issued, and remittances scrutinized for credit/loans access from the global financial market 10. Remittance-based investment Fund established

ARI: Activities Provide technical assistance to GVT institutions in putting in place the regulatory frameworks Carry out training and capacity building programmes Study remittances flows within Africa Policy research and dialogue on how remittances can contribute to the development of Sub-Saharan Africa Develop content and technology platforms for country-based payment and settlement systems for remittances

ARI: Activities, Cont… Develop partnership between ADB, African Central Banks and remittance companies to improve financial access Disseminate of data and research Prepare annual reports and annual conferences and meetings of policy makers

ARI Project: Organizational Structure and Governance arrangements WB: Overall Project Management AUC: Implementation AFDB, IOM: Partners and support to the management and implementation Steering Committee: B, AUC, AFDB & IOM

Specific Activities to be undertaken to start implementation Preparatory Phase ( ): - The World Bank is responsible for research, studies, capacity building and networking activities -The AUC is responsible for conducting 5-6 regional consultative meetings on the ARI Project idea -Ministerial Meeting at the end of the Preparatory Phase to decide on the creation of the ARI or whatever strategy based on the knowledge generated during the Preparatory Phase activities

Specific Activities to be undertaken to start implementation Establish the Steering Committee composed with AUC, World Bank, EC, ADB, IOM Set up office/Secretariat to the Committee at the AUC Identify and recruit staff for Secretariat to the Steering Committee: Head and 2 economists Establish links into the AUC: Interdepartmental Team of the ARI Project established and functional Establish links with country Diaspora focal points Establishment of the Technical Committee under the World Bank which will present a draft on this structure

THE END THANK YOU FOR KIND ATTENTION