May 15, 2023 (NAIROBI, Kenya): The Executive Secretary of the Intergovernmental Authority on Development (IGAD), Dr. Workneh Gebeyehu, and the Governor of the Central Bank of Kenya, Dr. Patrick Ngugi Njoroge, opened a two-day meeting of Governors of Central Banks from IGAD Member States in Nairobi today.
The aim of this meeting, held in partnership with the United Nations Capital Development Fund (UNCDF), is to review, discuss, and endorse an action plan for the implementation of the regional roadmap for the harmonization of remittance policies across IGAD member countries.
In his opening statement, Dr. Workneh emphasized IGAD’s recognition of the critical role of remittances in promoting economic development. “The region received remittances amounting to 9.5 billion US dollars in 2022, accounting for 3% of the region’s GDP. Therefore, it is crucial that we facilitate the flow of remittances by harmonizing policies and procedures across the region”, said Dr Workneh.
The Executive Secretary further emphasized the crucial role that remittances play in the economic development of the region, serving as a financial parachute and fiscal safety net. For many families in the IGAD region, remittances are a lifeline and a vital source of income. Despite the economic slowdown caused by the Covid-19 pandemic, the region received a higher level of remittances amounting to 8.1 billion US Dollars in 2021, which accounted for 3% of the region’s GDP according to the UNCDF. IGAD is privileged to be the first regional economic bloc to partner with UNCDF at the regional level to promote and implement the remittances for development project.
The meeting brings together Governors, deputy Governors, Directors of Central Banks from Djibouti, Ethiopia, Kenya, Somalia, South Sudan and Sudan. The action plan to be implemented will provide a framework for the implementation of policies to facilitate cross-border remittances, including measures to improve financial infrastructure and regulatory frameworks.
The United Nations Capital Development Fund (UNCDF) is technically supporting IGAD Secretariat as part of its efforts to promote financial inclusion and support the implementation of the Sustainable Development Goals (SDGs). The harmonization of remittance policies is critical to achieving SDG 10, which aims to reduce inequality within and among countries. Specifically, SDG 10 target 10.a which advocates for the reduction of transaction costs for migrant remittances.
The meeting is expected to conclude with the endorsement of the action plan of the roadmap and a commitment to work towards the implementation of policies that will facilitate cross-border remittances and support economic growth and IGAD’s regional integration agenda.
The Swedish International Development Agency, SIDA, and Swiss Development Cooperation (SDC) provide financial support to this initiative.