Angola: New study highlighting remittances in Angola calls for measures to enhance their development impact

Report
from International Organization for Migration
Published on 18 Dec 2009
With remittances crucial to family welfare and food security in Angola, a new IOM study argues the need to do more to build links with the Angolan diaspora and to lower remittance costs in order to maximize the developmental impact of remittances in the country.

The study, "Migrant Remittance Flows to Angola from Portugal and South Africa, and their Current Use and Impact on Receiving Households", released today in the Angolan capital, Luanda, also calls for continued efforts to facilitate investment in the Southern African country.

Interviews with 404 remittance-receiving family heads in Angola and 423 remittance sending migrants in Portugal and South Africa revealed that only 14 per cent of respondents used a portion of remittances for business purposes and even fewer, one percent, for investment in agricultural activities.

Most respondents, 67 per cent, said remittances were used to meet basic household necessities, pay for utilities and buy consumables, while 16 per cent of households were completely reliant on remittances for income.

Although levels of monthly income, housing conditions and asset accumulation indicated that remittance receiving households were not extremely poor or vulnerable, the report found that, nevertheless, remittances have improved food security for the majority of households and educational opportunities for some.

The study also looked at how Angolan migrants sent money home from Portugal and South Africa. While reliability was the most important characteristic influencing whether migrants chose remittance companies or hand-held delivery direct to homes, those interviewed in the two destination countries rarely used bank products to remit. Costs to do so averaged about 10 per cent of the amount transferred.

As a result, the study recommends the need to find ways to lower the cost of remitting by expanding and increasing competition among cross-border remittance services and by harmonizing remittance-related regulations.

The longstanding relationship established between the Angola and Portugal during Portugal's colonial period, migration dynamics within the Southern African Development Community (SADC) migration dynamics and the consequences of the armed conflict in Angola, have promoted Angolan migration flows to Portugal and South Africa. An estimated 33,000 Angolans are living in Portugal and at least several hundred thousands living in South Africa, with the most intensive migration occurring in the 1990's.

Angolan migrants across the world sent home an estimated US$969 million in 2007, representing two per cent of GDP. Given the country ranks 143rd out of 182 countries in human development after years of civil war and 40 per cent of the population living below the poverty line, remittances clearly are an important source of revenue for the country.

"The report clearly highlights the importance of remittances among Angolan households. But it also shows that the Angolan diaspora can contribute significantly to development and investment in the country, and not just to family income," says Katharina Schnöring, IOM Angola's Chief of Mission.

The study was commissioned by IOM in collaboration with the Angolan Ministry of Foreign Affairs (MIREX)/ Institute Providing Support to Angolan Communities Abroad (IAECAE) and the NGO partner Development Workshop.

For more information, please contact Katharina Schnöring on kschnöring@iom.int or tel: 00244 924 643 032

International Organization for Migration:
Copyright © IOM. All rights reserved.