Migration has win-win benefits: report

Johannesburg – With about 30 million Africans living outside their home countries, migration is a vital lifeline for the continent. Yet African governments need to do more to realize the full economic benefits of the phenomenon, says a new report by the African Development Bank and the World Bank.

The report, Leveraging Migration for Africa: Remittances, Skills, and Investments, presents data from new surveys. The report finds evidence that suggest migration and remittances reduce poverty in the origin communities.

Remittances lead to increased investments in health, education, and housing in Africa. Diasporas also provide capital, trade, knowledge, and technology transfers.

“Migration pressures will only rise in the future as a result of demographic changes of rising population in Africa and falling labor forces in Europe and many developed countries,” said Hans Timmer, director of development prospects at the World Bank.

“Therefore, adapting policy responses to demographic forces and crafting multilateral arrangements for managing future migration is essential.”

Two-thirds of migrants from Sub-Saharan Africa, particularly poorer migrants, go to other countries in the region, while more than 90% of migrants from North Africa have moved outside the African continent.

The top destinations for African migrants are France (9% of total emigrants), Cote d’Ivoire (8%), South Africa (6%), Saudi Arabia (5%), and the United States and the United Kingdom (4% each).

Shantayanan Devarajan, chief economist of the Africa region at the World Bank, said “Migration of skilled labor is particularly high in small and low-income African countries, which already have low levels of human capital. Fragile and post-war countries face even bigger challenges because of the flight of human capital. African governments and policy makers should focus on increasing education and skill levels and establishing an environment in which high-skilled workers have productive opportunities at home.”

“African governments need to strengthen ties between diasporas and home countries, protect migrants, and expand competition in remittance markets,” said Dilip Ratha, main author of the report and lead economist at the World Bank. “Otherwise, the potential of migration for Africa remains largely untapped.”

One innovation worth considering are diaspora bonds, which are sold by governments or private companies to nationals living abroad. These bonds have already been successful in tapping into assets of Israeli and Indian citizens living abroad.

According to Ratha¸ Sub-Saharan African countries can potentially raise $5–$10bn a year in diaspora bonds. Countries with large diasporas in high-income countries that can potentially issue diaspora bonds include Ethiopia, Ghana, Kenya, Liberia, Nigeria, Senegal, Uganda, and Zambia in Sub-Saharan Africa and Egypt, Morocco, and Tunisia in North Africa.

“African banks can improve their access to international capital markets by issuing bonds that are securitized by future remittance inflows,” said Mthuli Ncube, Chief Economist of the African Development Bank.

“The African Development Bank, the World Bank and bilateral donors can play a significant role in facilitating remittance securitization and mitigating the risks to African countries of issuing these remittance-backed bonds. Efforts can include technical assistance in project design and creditworthiness analysis, prudential debt management, and helping African countries obtain sovereign ratings.”

Recorded remittances into Africa, which grew fourfold between 1990 and 2010 to reach nearly $40bn in 2010, are the continent’s largest source of foreign capital after foreign direct investments.

Recent surveys show that investments such as land purchases, building a home, and starting a business were the highest uses of remittances sent home by African diaspora.

As a share of total investment, these represented 36% in Burkina Faso, 55% in Kenya, 57% in Nigeria, 15% in Senegal, and 20% in Uganda.

Education was the second-highest use of remittances from outside Africa into Nigeria and Uganda, the third highest into Burkina Faso, and the fourth highest into Kenya.

However, official remittance flows to Africa are significantly underestimated, with only about half of the countries in Sub-Saharan Africa collecting and reporting remittance data with any regularity.

The report finds it is still very expensive to send remittances to African countries, particularly within Africa. According to Ratha, these high costs encourage the use of informal channels and are an unnecessary burden for African migrants and remittance recipients.

DHL delivers fast-lane logistics to F1

Johannesburg - Global logistics provider, DHL, has announced that it will continue with its commitment to support the logistics needs of Formula 1 as the official logistics partner.

The company says it will support F1 in delivering equipment for the 2011 series.

“The 2011 Formula 1 season starts its engines in Melbourne this weekend and we are proud to be the Official Logistics Partner of Formula 1, ensuring that the organization and teams have everything in place when they need it,” says Ken Allen, CEO of DHL Express.

“Success in Formula 1 racing depends on a perfect mix of skills, commitment and a can-do attitude of trained and highly-capable professionals. The same applies to logistics.”

With its global customs clearance expertise, DHL simplifies the logistics of Formula 1 by ensuring fast-lane import of racing cars as well as their replacement parts – engines, tires and spares.

It also handles fuel requirements and additional freight, such as TV equipment, VIP tents, computer equipment, laptops as well as radio sets and headphones for communication purposes. The deliveries also include furnishings for the Formula One Paddock Club, which is the exclusive VIP hospitality for Formula 1.

DHL says it has specialized units to coordinate the transport of cars, equipment and fuel to the Formula 1 tracks around the world by air, sea and land – for both test sessions and GPs.

"DHL also has a 24-hour service point at the racetrack. The on-site team offers round-the-clock service for urgent shipments, customs clearance as well as shipments of hazardous goods and temperature controlled items. The teams can utilize DHL’s vast global network to pick up and deliver at any race circuit in the world," says the company.

In addition to providing logistics support, it said it also awards Formula 1 drivers with the Fastest Lap trophy, which recognizes the driver with the greatest number of fastest laps at the end of each season.

DHL is a global market leader in the logistics industry and commits its expertise in international express, air and ocean freight, road and rail transportation, contract logistics and international mail services.

It is a global network of more than 220 countries and territories with about 275 000 employees worldwide.

The company, is part of Deutsche Post DHL and the Group generated revenue of more than €51bn in 2010.