For Immediate Release
WASHINGTON, D.C. – The U.S. Agency for International Development today announces its commitment to support the operations of the Migration and Development Fund (MDF) administered by the African Development Bank. This commitment to the MDF is part of USAID efforts to work more closely with diaspora communities to promote their engagement in the development of their countries of origin.
The MDF is a multi-donor grant facility designed to leverage the human and financial resources of diaspora communities for the development of Africa and to optimize the flow of remittances. Specifically, the fund provides financing for innovations that:
- Improve knowledge about migrant remittances in Africa
- Support reforms of the regulatory framework that governs money transfer conditions
- Develop new financial products
- Support productive investment in migrants’ countries of origin
- Support local development in migrants’ countries of origin.
Currently about 30 million people in Africa – 3 percent of the population – have migrated within Africa or to other continents. This population holds tremendous potential for the development of Africa, as indicated by a strong flow of remittances. Remittance inflows to Africa have quadrupled between 1990 and 2010, reaching nearly $40 billion (2.6 percent of GDP).
Remittances are the continent’s largest source of net foreign inflows after foreign direct investments (FDI). They directly affect economic growth by increasing expenditures on health, education and nutrition, thereby contributing to long-term productivity gains, and by diversifying household sources of income, functioning as insurance against shocks.
However, the cost of sending remittances to Sub-Sahara Africa is still the highest among developing countries. The Fund will address the high cost of transferring remittances by encouraging competition among money transfer operators, by supporting regulatory framework, and by supporting the introduction of innovative technologies.
For more information on the MDF: www.fundsforafrica.org.
Last updated: March 06, 2014