Money Transfer and International Trade
Policy Paper by Gro Trade Consulting
In the year 2007, 318 billion dollars were sent back home by 150 Million international migrants. The top remittance earners were India at 27 billion, China at 25.7 billion, Mexico 25bn, the Philippines at 17billion and Sub-Sahara Africa received 19 billion. According to the World Bank, the remittance fees range from 6% of amount sent for inter-bank transfers to 20% for money transmittance companies like western Union. On top of the remittance fee is a hidden exchange rate charge.
Insofar as the current money transfer companies and banks do a great deal in helping deliver the much needed help to families, the high transfer fees they charge make them unsuitable as a system of payment in international business. These charges wipe out African Sme profits Furthermore; the high cost of borrowing money in Africa further increases the cost of doing business. With the current financial crisis pushing many migrant workers out of work, the remittance problem has never been worse.
The emerging consensus is that more competition in the money transfer industry will bring the remittance fees down. International Bank transfers are often reported as a highly efficient alternative to money transfer companies because they streamline the complicated process of handling cross border and inter-country disbursements and collections since each country has a different clearing system with its own rules and regulations thereby saving customers up to 90% in fees.
However, maintaining multiple Bank accounts and complying with country specific payment format is expensive and time consuming and payment delivery and time is uncertain. Furthermore, more than 80% percent of the population in Sub Saharan Africa do not keep a bank account. This calls for the use of technology that is accessible to people without bank accounts but is affordable.
The EU-Africa Trade and Investment conference (http://eatc2010.blogspot.com/)will seek as one of its objectives to find the most competitive rates for money transfer. To this end, three companies with some of the most competitive rates have been identified, these are; Atena, a Dutch company that charges a standard rate of 3% regardless of amount. The other is Xoom which charges from 0.3%-8% per transaction depending on the amount being sent. The third alternative is Money transfer software (MTS).
MTS is an easy to use interface that can be used by anyone with or without computer experience and supports multi-currencies. It keeps track of the recipient’s previous transactions in the history. The transaction is available immediately and is available for the payee agencies worldwide.
Therefore, the shift from western Union which charges 20% per money transfer transaction to Atena which charges 3% percent per transaction would translate into savings of 3.23 billion dollars for Africa per year and 54 billion for global remittances. These savings will help the small companies to increase their investments and consequently increase their share of international trade.
http://eatc2010.blogspot.com/
Monday, November 16, 2009
Wednesday, November 4, 2009
Regional Tier Versus Multi-level Governance- The Uganda Scenario
Multi-level Governance would work better than Regional Tier
The regional tier federal system being proposed by the Uganda government, looks like a basket mix of apples and tomatoes, although these two are similar in shape, one is a fruit and the other a vegetable.
Ugandans will benefit greatly by considering a third option on top of the current system and the regional tier, this would be what Shakespeare called the 'third way'. This third way is what is in use in European Union Politics and is called Multi-level Governance (MLG).
MLG is a theoretical perspective on the organization of modern states that acknowledges flexible structures of overlapping jurisdictions, both above and below the national government as well as in a lateral relationship to it. The increasing fluidity of political power is an issue for scholars of politics and government
The transfer of competencies upwards to supra-national organizations such as the East African Community, sideways to quasi-autonomous actors like Inspector General of Government, and downwards to sub-national authorities like districts, has arguably transformed both the structure and capacity of national governments. It is within this context that the concept of multi-level governance emerges as an approach to understanding the dynamic inter-relationship within and between different levels of governance and government. Multi-level governance is a novel analytical framework that refines traditionally dominant approaches.
In the case of European Union politics, regions such as England, Scotland, Bavaria, and Flanders, Catalonia are considered to be on the same level which is overlapping with European Cities such as London and Antwerp. Each of these levels contributes to European legislation separately but where their interests merge, they can put up a common position, this common position increases the power of sub-national actors.
Unlike the regional tier which suggests that MPs, counsellors and cultural leaders from the same should have a common assembly, in MLG you never find a situation where the European Parliament, the British Parliament, the Scottish parliament and Queen Elizabeth's representative debate policy together. Each level is considered as a special interest group and will only meet that arm of government that is concerned with those interests.
This creates space for all actors in a democracy to contribute to the law making process. Kingdoms, although apolitical, would unite to pursue and defend their interests to the appropriate organ of government or Parliamentary committee, businesses will unite under an umbrella such as the Chamber of commerce to lobby the Parliament committee on trade, schools and universities will unite and lobby the Parliamentary committee on education et cetera. Another major advantage of MLG is that it creates a breathing space for nations trapped within states, in this context, regional cooperation would allow Buganda to cooperate with Rift valley province of Kenya or Kampala to have direct Cooperation with Kigali.
Therefore the Parliament of the republic of Uganda should consider adopting multi-level governance (MLG) as it will give more power to the people, more power to our parliament and more legitimacy to the state.
The regional tier federal system being proposed by the Uganda government, looks like a basket mix of apples and tomatoes, although these two are similar in shape, one is a fruit and the other a vegetable.
Ugandans will benefit greatly by considering a third option on top of the current system and the regional tier, this would be what Shakespeare called the 'third way'. This third way is what is in use in European Union Politics and is called Multi-level Governance (MLG).
MLG is a theoretical perspective on the organization of modern states that acknowledges flexible structures of overlapping jurisdictions, both above and below the national government as well as in a lateral relationship to it. The increasing fluidity of political power is an issue for scholars of politics and government
The transfer of competencies upwards to supra-national organizations such as the East African Community, sideways to quasi-autonomous actors like Inspector General of Government, and downwards to sub-national authorities like districts, has arguably transformed both the structure and capacity of national governments. It is within this context that the concept of multi-level governance emerges as an approach to understanding the dynamic inter-relationship within and between different levels of governance and government. Multi-level governance is a novel analytical framework that refines traditionally dominant approaches.
In the case of European Union politics, regions such as England, Scotland, Bavaria, and Flanders, Catalonia are considered to be on the same level which is overlapping with European Cities such as London and Antwerp. Each of these levels contributes to European legislation separately but where their interests merge, they can put up a common position, this common position increases the power of sub-national actors.
Unlike the regional tier which suggests that MPs, counsellors and cultural leaders from the same should have a common assembly, in MLG you never find a situation where the European Parliament, the British Parliament, the Scottish parliament and Queen Elizabeth's representative debate policy together. Each level is considered as a special interest group and will only meet that arm of government that is concerned with those interests.
This creates space for all actors in a democracy to contribute to the law making process. Kingdoms, although apolitical, would unite to pursue and defend their interests to the appropriate organ of government or Parliamentary committee, businesses will unite under an umbrella such as the Chamber of commerce to lobby the Parliament committee on trade, schools and universities will unite and lobby the Parliamentary committee on education et cetera. Another major advantage of MLG is that it creates a breathing space for nations trapped within states, in this context, regional cooperation would allow Buganda to cooperate with Rift valley province of Kenya or Kampala to have direct Cooperation with Kigali.
Therefore the Parliament of the republic of Uganda should consider adopting multi-level governance (MLG) as it will give more power to the people, more power to our parliament and more legitimacy to the state.
Subscribe to:
Posts (Atom)
