Development Finance Impact Project
(REMITTANCES TO THE GAMBIA)
BY ISAAC KWAKU ADU
PROBLEM
One of the most important issues to migrants who has left the shores of their country to search for
greener pastures due poverty has been the cost associated to remittances. In fact, I have seen and
heard how remittances changes the lives of recipients in developing countries. I would like to
concentrate on The Gambia. According to data available from the World Bank presented by Dilip
Ratha in 2012, it cost $24.8 to send $200.00 to Sub Saharan Africa on average and what makes it
too serious is the money transfer within the African continent. Example, sending $200.00 from
Ghana to Nigeria on average is $32.00 (average cost is 16%) which is outrageous, this figure
excludes FX commissions and bank account maintenance fees for inter-bank transfers.
REASONS WHY GOVERNMENT/PRIVATE SECTOR WOULD WANT TO PARTICIPATE
According to the World Bank data, in 2013 alone remittances to families and friends was $413
billion which is three times global foreign aid of about $135 billion. No one seem to pay attention
to what these monies sent home are doing and can do in the lives of the poor ones in the developing
countries. The Gambia, a country with a total population (2014) of 1,908,954; isn’t it surprising
that approximately 74% (578,182.5) of the rural population of 782,385 people are considered
poor?
The poverty headcount ratio of national poverty line as a percentage of the population currently
stands at 48.4% (almost half of the population). Available data from the World Bank indicates that
Official Development Assistance to The Gambia in 2010 was $134.7 million whiles remittances
in the same period was $116 million and it has increased to $191 million in 2014. This figure
represent 20% of the country’s GDP.
This are the monies going to the villages to take care of their education health, shelter, etc. which
have been neglected and are in the hands of the individuals. If remittances is almost the same as
ODA, then, a quick look at the hindrances to sending money to the Gambia should be critically
looked at. I am very sure that when the associated cost are well addressed ti will go a long way to
address what the ODAs money cannot reach.
“In 2007, a study conducted by Western Union (money transfer) revealed that Diaspora
remittances to developing countries were estimated at $240 billion. This is twice the value of ODA
from foreign direct Investment (FDI) said Dr. Mamadou Tangara, Minister of Foreign Affairs and
Gambians Abroad.” This is an indication that if all partners including government and private
sector (money transfer agencies) get together to address the cost associated with the money
transfers a lot could be achieve.

World Bank statistics indicate that the number of Gambians living abroad increased from
approximately 35,000 in 2000 to approximately 65,000 in 2010 whiles some estimates quote up to
90,000. To throw more light on the impact of remittances on the Sustainable Development Goals
in Gambia, the International Criminal Court (ICC) Chief prosecutor (2012), Fatou Bom Bensouda
sad “almost two third of Gambian graduates now lives and study in abroad.” This is a good
development in the sense that monies sent home will go a long way to achieve the SDGs if all
players pay attention to the obstacles of remittances to developing countries especially The Gambia.
MAIN OBSTACLES OF REMITTANCES TO THE GAMBIA
Most government have established links with the money transfer agencies with the various post
offices across the country. But is sad to say that not all the towns and villages has a reliable post
office. This means that recipients has to travelled some distance before having access to the money
which also add some cost to the already cash strapped beneficiary.
In the sender is in a developing country it becomes very difficult since some government of these
developing countries has restricted monies going out through the well-known money transfer
system (like western union); in such cases the sender has no option than to do it through the banks
which charges exorbitant fees irrespective of how much you want to send.
As earlier indicated, according to the World Bank data, it cost $24.8 to send just $200 to Sub
Saharan Africa. The $24.8 fee can save a life in the rural Gambia,; in the eyes of the developed
world it is nothing but in the eye of the rural poor it is a huge money which serve seed money
(capital) to start a petty trade). It is even worse when it is intra-African transfers.
PROPOSE SOLUTIONS
Transfer of money through mobile phone is gradually gaining weight in a country like Ghana. Can
we have a system where major transfer agencies could be linked to these mobile phone money
operators with the aim of sending money to people especially those in the village? This could save
them the distance they have to make in order to have the remittances, it will also save them from
any associated cost. Because of competition among the mobile phone operators most of them does
not charge for withdrawing money from your mobile wallet. Almost all the six mobile phone
operators in Ghana have offices everywhere including remote villages. This could be a better
option compared to the post offices.
It is clear that small amount of monies sent to developing countries goes into the hands of the
under-privilege and the vulnerable, so, I propose that funds up to one thousand dollars should be
exempted from any type of fee both at home and abroad. This will enable the sender (off course
from a poor home) to add the charges to the amount to be send home.
The regulations regarding money transfers are too rigid and there is the need to make it more
flexible. Agreements with those big money transfer agencies should either be relaxed or abolish

completely to give way to more human agencies that believes in the principle of the option for the
poor and the vulnerable, where the poor and vulnerable will be cater for without any charges.
Last but not the least of the issue of diaspora bond. Major migrants that have made it have their
monies lying in banks that offer absolutely 0%. Funds sent home normally goes to better the lives
of family and friends but cannot be controlled nationally by the government for development.
These funds are given to solve a temporal problem; it cannot be a path of permanent development.
It is high time government of developing countries issue diaspora bonds where government can
tap into the asset of its own who are passionate about developing their own country. Some are of
the view that these monies can breeds corruption; a thorough investigation and a prudent
investment of these funds can go a long way to change the development history of a country like
The Gambia who depend so much on remittances. If Israel and India has successfully done it, I
call for the government of the Gambia to learn how they did it and succeeded.
CHART 1
Source: World Bank, World Development Indicators, 2010; Note 2010 is estimated for ODA.
BIBLIOGRAPHY
http://www.ruralpovertyportal.org/country/home/tags/gambia
http://www.unicef.org/infobycountry/gambia_statistics.html
http://data.worldbank.org/country/gambia
http://gambianewsonline.blogspot.jp/2012/01/two-third-of-gambian-graduates-now-live.html