UPU News:-UPU and IOM join forces to foster Burundi’s development

In Geneva this week, the IOM and the UPU called on donor countries to support a proposed USD $4 million pilot project in Burundi, using the postal network’s unique capabilities to stimulate development.

The joint four-year project, in cooperation with Burundi Post, seeks to solve a range of problems experienced by Burundi’s rural population and members of the diaspora.

Besides high remittance service fees, rural populations in Burundi are often excluded from telecommunication services and lack access to basic financial services - only 12.5% of Burundians have an account with a financial institution.

UPU Deputy Director General Pascal Clivaz stressed the project’s importance in addressing migrants’ needs and the development objectives of their country of origin.

“With 640,000 post offices, the global postal network is everywhere and present in very remote areas,” he said. “Posts offer physical and electronic services, as well as an array of financial services accessible to everyone, from money transfers to credit. No other economic actor is able to unite all these competencies together.”

Salvatore Nizigiyimana, director general of Burundi Post, said the IOM-UPU project would rely on  postal services to maximize migrants’ contribution to the development of Burundi’s rural communities by also improving access to telecommunication services and helping small local producers access international markets.

Remittance fees key concern

“In Burundi,” IOM Director General William Lacy Swing said, “the diaspora sends home an estimated USD 48 million in remittances every year, of which more than 10% is lost to remittance fees. We want to reduce this loss for Burundi and for all countries.”

World Bank estimates for remittances this year top $435 billion—a 5% increase over 2013.

“Migrant remittances have a direct impact on development and have proven to be more resilient to economic crises -- including the current one -- than foreign direct investment or economic aid,” said Swing, adding that the World Bank’s remittance total would be even higher once informal transfers are taken into account. 

Yet, he added, many of the world’s poorest remitters are being overcharged.

African migrants sent home $60 billion to Africa in 2012, he said, but many were overcharged—an estimated $4 billion—by money transfer companies, which averaged 12.4% in charges, compared to 6.54% charged to South Asians.

Citing a recent World Bank report, Director General Swing noted that South Africa, Tanzania and Ghana were the most expensive sending countries in Africa, charging 20.7 percent, 19.7 percent and 19.0 percent respectively.