Millions of Africans live in migrant communities around the world, and a large number of these regularly send money to family back home. In 2010, the total amount of these remittances topped $50 billion – and possibly up to three times that, as much of the money is sent informally. For comparison, official development assistance that year was $43 billion, according to the World Bank. There is a difference too in the manner of aid. Because remittances are sent directly to family members, they are targeted and aimed at specific needs, be they schooling, or essentials like food and medicine. A recent study showed that nearly half of the population of Somalia, among many other countries, is dependent on money sent from abroad and that the total amount of remittances sent annually reaches $350 billion.

In some ways, money sent directly to families in developing countries can be better spent than official international assistance, as there is no bureaucracy to go through and people can address their needs directly. However, this does not allow for infrastructural development and other government driven projects. And if the income of many people is generated abroad, then local governments receive no benefit from taxation. Therefore, international aid is still important as a facilitator of broader governmental programs in conjunction with the individually distributed remittances.

– David M Wilson
Sources: The Economist, BBC
Photo: Zehabesha