ADDIS ABABA, March 26, 2012 -- The African Union (AU) is one step closer to establishing a continental body to harness the power of approximately US$40 billion in remittances sent to the continent each year.
At the Fifth Joint Annual Meetings of the AU Conference of Ministers of Economy and Finance and Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development this month, a resolution was adopted that took note of the decision of the Executive council regarding creation of the Institute.
This resolution is an important step in the creation of the African Institute for Remittances, which has been undertaken by the AU in partnership with the European Commission, the International Organization for Migration, the African Development Bank, and the World Bank. African Ministers are now actively engaged in designing a structure that will support their nations in leveraging remittance flows for poverty reduction and economic growth.
According to the report issued by the AU's Committee of Experts, this initiative will "reinforce the capacities of various stakeholders with a view to adopting concrete strategies and putting into place operational instruments that would make it possible for remittances to serve as instruments of development and poverty reduction in Africa." The Institute will also enhance the capacity of African governments to track remittance flows and help migrants and recipients identify ways of leveraging these funds to create sustainable incomes.
"Remittances help Africans across the continent contribute to social development, support new businesses and help children stay in school,” said Dr. Olawale Maiyegun, director of AU Social Affairs. “The African Institute for Remittances will help governments ensure equity in remittance markets and identify ways of scaling up their impact."
In theMinisterial Statement delivered at the AU conference, AU Ministers of Finance recognized the increasing contribution of remittances to economic and social development in Africa and urged the AU Commission to expedite work on establishment of the institute.
While the Institute is not yet operational, the interest of AU member states and their Ministers of Finance and Planning have now been clearly expressed. All stakeholders recognize that remittances represent a significant financial flow to the African continent and that the African Union has an important role to play in representing the interests of African nations and their citizens by coordinating efforts to better harness these resources.