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Is Mogadishu Shopping For Protection Post-ATMIS Troops?
It has been less than three months since the signing of the MoU between Ethiopia and Somaliland, but the controversial deal has already contributed substantially to increased tensions in the region, and set off a diplomatic spat between Addis Ababa and Mogadishu. Continue reading “Is Mogadishu Shopping For Protection Post-ATMIS Troops?”→
International Law and How It Affects Somaliland Republic
International law is a fascinating and complex body of rules that governs relations between states and other entities having an international legal identity. It is sometimes known as public international law or the law of nations. Think of it as a manual for international relations covering a wide range of subjects like: Continue reading “International Law and How It Affects Somaliland Republic”→
Diplomacy Prevents Ecological Disaster in the Red Sea
The U.N. announced the successful offloading of 1.1 million barrels of oil from the derelict Safer supertanker off Yemen’s Red Sea coast, Aug. 11. Following the onset of Yemen’s civil war in 2015, the Safer gradually deteriorated and was left unmaintained, putting it at serious risk of a leak or Continue reading “Diplomacy Prevents Ecological Disaster in the Red Sea”→
Sudan’s warring lords general Abdel Fattah Al-Burhan, Chairman of the Transitional Sovereign Council of the Republic of Sudan, and his rival Mohamed Hamdan Dagalo (aka Hemedti), commander of the Rapid Support Forces (RSF), have agreed to hold a face-to-face meeting. IGAD is expected to make preparations and designate a team of senior diplomats and interlocutors for the talks. Continue reading “Al-Burhan, Hemedti Agree to Talk”→
Partnerships, Friendly Policies are Key to Growing Remittances
I recently joined stakeholders from around the world at the UN-led Global Forum for Remittances, Investment and Development (GFRID) held here in Nairobi.
The three-day summit was a precursor to the International Day of Family Remittance (IDFR), which was adopted by the UN General Assembly in 2018 and celebrated on 16th June every year.
During a panel discussion, I engaged with stakeholders on the adoption of digital remittances and measures that would remove the barriers limiting its uptake, and what changes are needed in the money transfer ecosystem.
Remittance inflows to Kenya have been steadily rising in the past 10 to 15 years. They are the country’s leading source of foreign exchange and rival export earnings from key economic sectors such as tourism, tea, and horticulture.
According to data from the World Bank, Kenya’s annual formal remittances amount to almost the same value as all its five neighbours put together — $4 billion compared to $4.9 billion.
The latest figures from the Central Bank of Kenya show that diaspora remittances rose by 8.34 percent to $4.027 billion in 2022. This has largely been due to a supportive environment and conducive policies.
On average, 60 percent of remittances to Kenya are done through digital channels. However, to fully realise the potential of formal remittances across the continent, there are several key policies and interventions that need to be considered.
Firstly, there is a need to embrace partnerships and foster greater collaboration between different players to achieve a wider reach.
In 2009, we launched our first remittance solution in partnership with Western Union. It enabled Kenyans living abroad to easily send money home through M-Pesa.
One of the greatest impacts M-Pesa has had is significantly lowering the cost of receiving remittances from more than 10 percent of the transaction value to about 3.0 percent currently.
As a result, we have achieved the SDG goal of bringing remittance costs down to 3.0 percent more than seven years ahead of the 2030 target.
Partnerships are critical also to expanding access and use of remittances as they leverage each player’s strength in the value chain.
As an example, M-Pesa partnered with Visa to make out international payments, which is an area Visa is strong in.
Additionally, we have increased the number of remittance partners to more than 25 including other large international players such as Western Union, PayPal, and Google Pay.
Increasing the frequency of inter-governmental engagements to promote cross-border remittances through harmonised policies and regional regulations will drive penetration and access to remittances.
Thirdly, a review of the tax regulations with the aim of lowering remittance costs will drive higher volumes and usage of international remittances.
Governments would then benefit from the increased forex flows and increased revenue collections from higher volumes.
Finally, governments should explore more favourable entry requirements to attract more remittance operators.
More players lead to innovations that address different customer needs therefore reducing the use of informal remittance channels.