The need for inclusive effort of all pertinent bodies at home and abroad has been underlined in order to encourage remittances through formal channels.
A researcher, Zerihun Mohammed, who presented his study about remittance from Ethiopian labor migrants in South Africa and Middle East countries said most of the remittances from the countries have been sent through informal channels due to various reasons, including the big gap in currency exchange rate between the formal and informal channel.
Being undocumented, the migrants cannot also access financial institutions and pay high rates to transfer money in formal channels, he added.
According to the study of Forum for Social Studies, sending remittances through informal channels affects the economy, especially in the import sector.
Therefore, Zerihun suggested that the Government of Ethiopia devise an overall migration policy which directs its actions in an integrated manner because such a policy is important, considering the youthfulness of the country’s population.
The migrants need to be legal because migrants who have the required documents would not face problems with regard to accessing financial services, and documented migrants strengthen formal transfer of remittance to Ethiopia, he added.
The researcher also suggested that the Government of Ethiopia provide pre-departure training on financial literacy to migrant workers because such training could encourage migrant workers to develop awareness about opening bank accounts, saving, and remittance transfer systems.
He further advised that the government devise well-thought out policies and mechanisms to narrow down the gap between the official and unofficial rates of currency exchange and expand access to and enhance efficiency of the formal transfer channels.
According to him, banks and financial institutions need also to provide financial products and incentives that could motivate migrant workers to transfer their remittances through the formal system by offering preferential interest rates to the Ethiopian Diaspora who open saving accounts and transfer their savings in hard currencies.
Also, the host governments of migrants need to promote safe and documented migration, provide protection to migrant workers by incorporating international norms (conventions) which provide guidelines for the protection of the rights of migrant workers, and find ways and means to regularize irregular migrant laborers.
The researcher further proposed that international agencies and civil society organizations advocate and promote safe and documented labor migration and strive for regularization of undocumented migrant laborers, advocate for the protection of the rights of migrant workers, both in the host and origin countries, support asset-building activities of migrant workers and their families using remittances.
Source: Ethiopian News Agency