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All over the world migrant workers are sending money home to their families. The money pays hospital bills and school fees, buys land, builds houses and sets up small businesses. The cash goes from the US back to Mexico, from the Gulf back to India, from the UK back to Somalia, and from South Africa back to Malawi, Zimbabwe and the rest of southern Africa.
But what these workers probably do not realize, since they usually only ever send to one country, is that the cost of sending money varies greatly. Now a study of the cost of remittances, carried out by London's Overseas Development Institute with support from the fund-raising charity Comic Relief, has revealed that transfers to African countries cost around half as much again as the global average, and twice as much as transfers to Latin America.
The ODI estimates that if remittance charges were brought down to the world average, the money saved could educate an extra 14 million primary school children, half of all those currently out of school on the continent.
The bulk of this money goes through money transfer companies rather than banks, since the recipients are unlikely to have bank accounts, and transfer companies are quick, efficient and have a wide network of agents. But just two big international players dominate the business in Africa, Moneygram and Western Union, and participants in a meeting to launch the research were highly critical of the way they seemed to be abusing their market dominance.
Rwanda's High Commissioner in London, Williams Nkurunziza, said he was shocked at what the report revealed. “If you look at the remittances, 30 or 40 percent of the money that goes to Africa goes to rural areas,” he said. “This money goes to the people who are most needy, and you are allowing a multinational corporation to take bread out of the mouth of hungry children. This is not what I would call responsible capitalism!”
Glenys Kinnock, opposition spokesman on International Development in the upper house of the UK parliament, who chaired the meeting, called on the country's financial regulatory authority to intervene over the issue of excessive charges. “It is not a technocratic issue,” she said, “although it may sound like one. It is also about people's lives and the future of their children... These things have to change. We can't put up any longer with the prospect of its making things so difficult, very often impossible, for people who have such needs.”
At the end of last year, when the ODI did its research, the fees and charges to send money to most of Africa were around 12 percent - a bit less to Zambia or Tanzania, a bit more to Uganda, Malawi and the Gambia - against a world average of just over 8 percent. Even that is quite expensive; the governments of the G8 and G20 countries have pledged themselves to working towards reducing this to 5 percent.
It found that in more than 30 countries the two big players had more than 50 percent of the market; and in 10 countries they had more than 90 percent. Sometimes either Moneygram or Western Union had an effective monopoly, but even where both companies were present it did not necessarily mean that customers had much choice; one company could still have a monopoly of outlets in a particular area, and the companies habitually make their paying-out agents sign contracts promising not to also act as agents for their rivals.
Competition has been limited by the fallout from the US “war on terror”, with the banks who do bulk international transfers citing money-laundering and anti-terrorism regulations as the reason they are reluctant to extend facilities to smaller companies. Now only the biggest of the Somali companies, Dahabshiil, still has an account with a major British bank (Barclays) and even that concession was forced by a court case and is only until other arrangements can be put in place.
Inter-Africa transfers cost most
Dilip Ratha, who works on these issues for the World Bank says exchange controls are one of the reasons the rates are so high; in some places sending money out of the country is illegal. “So if you are sending money,” he says, “let's say from Benin to Ghana, it is actually allowed (in some countries it's not even allowed) but first the CFA has to be passed through into euros or sterling or dollars, and then it has to be transferred back into the local cedi, and in both cases you pay commission. Some sort of regional currency market really needs to be created.”
"So if you are sending money, let's say from Benin to Ghana, it is actually allowed (in some countries it's not even allowed) but first the CFA has to be passed through into euros or sterling or dollars, and then it has to be transferred back into the local cedi, and in both cases you pay commission. Some sort of regional currency market really needs to be created"
The report found 10 routes with bank transfer charges over 20 percent. Charges from Nigeria to Ghana were 22 percent. To send from Tanzania to the rest of East Africa, or from South Africa to its near neighbours is particularly expensive, peaking at 25 percent for bank transfers between South African and Malawi. Some of the fees charged by money transfer companies are even higher; if you send money that way from Ghana to Nigeria you may have to pay a staggering 39 percent.
In some places mobile phone based systems like M-Pesa have made in-country transfers much easier and cheaper, but they haven't really taken off internationally, largely because conservative, inflexible regulatory systems insist that all international transfers must go through conventional banks. And African banks tend to have very high charges, often because they are forced by governments to finance government projects or make uncommercial loans.
Chukwuemeka Chikezie of the Up Africa consultancy told IRIN a lot of the responsibility lay with African governments. “One of the reasons M-Pesa took off in Kenya was because the authorities nurtured and enabled innovation. If you look at other countries the regulators have tended to stifle innovation. They are very risk-averse and they don't enable even limited experiments to prove that the markets can absorb technical innovation.”
In addition, money-laundering regulations are putting impossible demands on systems designed to serve the poor, requiring, for instance, “know your customer” procedures like taking copies of ID documents for anyone receiving an international payout. Selma Ribica of M-Pesa points out this is an impossibility for agents in rural areas with no power supply. She told IRIN she would like to see a more realistic, tiered approach with much lighter regulation for small international transfers (under, say, US$200-300) which are most unlikely to have anything to do with money laundering.
Beware Facebook, Walmart
Facebook has just proposed allowing transfers between customers who have accounts with the company which they normally use to make payments for online games. So far this is only proposed for payments within the European Union, but Facebook has a huge geographical spread and has said it is keen to extend its reach in Africa.
And the big profits made by the transfer companies are tempting other players into the market. The latest to announce it is starting money transfers is the US supermarket chain Walmart, with recipients being able to pick up their cash from any shop in the chain. To start with this will only work within the United States and Puerto Rico, but Walmart is an international group with nearly 350 stores in South Africa, and it also has a presence in Botswana, Lesotho, Swaziland, Malawi and Mozambique, opening up the tempting prospect of a new, and cheaper way for workers to send money home.
All these new ways of sending money aim to undercut Moneygram and Western Union. Now Western Union has responded by offering so-called “zero-fee” transfers to Africa if the money is sent from a bank account rather by credit card or cash. This would mean a saving of just under £5 ($8.40) for someone sending $100 from the UK to Liberia. The company would still make money (nearly $4) by using a favourable exchange rate, but it would bring the cost down to just below the G8/G20 target.
For African's hard-pressed and hard-working migrants and their families back home, change may - finally - be on the way.
eb/cb99977 201404221522570983.jpg Feature Politics and Economics Remittance rip-offs IRIN LONDON Angola Burkina Faso Burundi Benin Botswana DRC Congo, Republic of Côte d’Ivoire Cameroon Colombia Cape Verde Djibouti Eritrea Ethiopia Gabon Ghana Gambia Guinea Equatorial Guinea Guinea-Bissau Kenya Liberia Lesotho Morocco Madagascar Mali Mauritania Mauritius Malawi Mozambique Namibia Niger Nigeria Rwanda Seychelles Sudan Sierra Leone Senegal Somalia Sao Tome and Principe eSwatini Chad Togo Tanzania Uganda Samoa South Africa Zambia Zimbabwe
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Cumba, la “mamma delle galline”: “Le donne portano avanti la Guinea-Bissau”
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As the Ebola caseload rises to over 5,350, aid agencies and governments in countries not yet affected by the deadly virus are gearing up for its potential spread across new borders by pre-positioning supplies, training health workers, identifying isolation centres, and disseminating prevention campaign messages, among other activities.
Countries that share a land border with the affected countries, including Côte d'Ivoire, Guinea Bissau, and Mali, are considered to be most at risk.
"It is vitally important that, countries - especially surrounding countries that don't have Ebola cases as of yet - are prepared for a worst case scenario," said Pieter Desloovere, a spokesperson for the World Health Organization (WHO).
In August, WHO issued an Ebola Response Roadmap to help countries across the region limit the spread of the virus. One of its three objectives is to strengthen the ability of all countries to detect and deal with any potential cases.
"The reason that Ebola started in Guinea and has since spread to Liberia and other countries is that no one was paying attention," said Grev Hunt, the UN Children's Fund's (UNICEF's) sub-regional coordinator for the Ebola outbreak. "We were caught unaware. But now, we are paying very close attention to what is going on and making sure the same thing won't happen again."
Unlike in Guinea, Liberia and Sierra Leone, where response plans and training materials had to be created from scratch, UNICEF is now replicating those resources and giving them to neighbouring countries, saving time and effort.
The International Federation of Red Cross and Red Crescent Societies (IFRC) says they have put in place Ebola preparedness and response activities in 11 countries across West Africa, and many local and international NGOs have been pre-positioning medical supplies, training health workers and educating the public.
"Failing to plan is actually planning to fail," said Unni Krishnan, the head of disaster preparedness and response for Plan International. "And we know from previous disasters that a dollar you put towards preparedness... tends to save thousands, even hundreds of thousands, of lives."
Key to prevention and preparedness in at-risk countries is having access to timely funding, said the UN Office for the Coordination of Humanitarian Affairs (OCHA). Senegal currently has US$5.7 million at the ready to use towards Ebola preparation and prevention.
Mali has around $3.6 million and Côte d'Ivoire $2.9 million. In Guinea Bissau, where the health system is extremely weak, only $800,000 is currently available for Ebola-related activities. "It's quite a fragile situation right now," said Daniel Sanha, a communication officers for the Guinea Bissau Red Cross. "We have a contingency plan in place, but the Red Cross still has no funds to implement any Ebola intervention activities. At the same time, the government doesn't have enough funds or equipment to take all the necessary precautions."
Mass public education campaigns
National media campaigns, including radio shows, TV programmes and other on-air broadcasts, are now under way in all sub-regional countries to educate people about Ebola and give them enough information to protect themselves, as well as to prevent rumours and misunderstandings from spreading.
"This is the first time we have had an Ebola outbreak in West Africa and part of the challenge we are facing is that people have no idea what the disease actually is or how it is spread," Desloovere said.
Volunteers in Senegal, Mali, Côte d'Ivoire and Guinea-Bissau are handing out pamphlets and flyers door to door, as well as posting them in public areas. Social media platforms, including Facebook and Twitter, along with text messages to mobile phone subscribers, are being used by Health Ministries and aid agencies to transmit information and to remind people to practise safe hygiene measures, and to go to a clinic if they detect symptoms.
UNICEF says the messages, which have all been approved by the Ministries of Health, are transmitted in local languages and in culturally appropriate ways. Rather than urging families not to bury their dead in the traditional way, for instance, aid agencies work with communities to find a safer burial procedure that both are comfortable with.
"Our message is very simple," said Buba Darbo, the head of disaster management for the Gambian Red Cross. "Don't touch a sick person, don't touch a dead body. If everyone follows this advice they will prevent themselves from getting Ebola."
Some messaging specifies that people should avoid shaking hands as a gesture of greeting.
Aid agencies have also begun working with religious leaders and local community leaders to spread messages about what to do, and not do, in case of possible Ebola infections.
Health worker training
Doctors and nurses across the region are being trained to spot possible cases, as well as to follow protocol for reporting suspected cases, how to prevent any further contamination and how to protect themselves.
"Educating and protecting our health workers is a top priority," said Ibrahima Sy, a grants manager and health expert with the Open Society Initiative of West Africa (OSIWA). "We need to put at their disposal all the materials they need to avoid contamination, and arm them with the information they need to avoid further spread of this virus."
In Côte d'Ivoire, for example, the Red Cross has been conducting staged simulations of Ebola cases, so that health workers know exactly what to do if they encounter a suspected case.
"We hope Ebola never comes here, but if a case were to be declared today, with the emergency health system we have in place, we are ready to take charge of it," said Franck Kodjo, the communications officer for Côte d'Ivoire's Red Cross. "All the actors, from the Ministry of Health to the local volunteers, we are prepared to take it on."
Other countries, such as The Gambia, have been training healthcare workers on how to handle the dead bodies of suspected cases.
Thus far over 300 health workers in Guinea, Liberia and Sierra Leone have contracted Ebola, according to WHO.
Specialized prevention and response teams
To help coordinate prevention efforts and put such measures in place, many countries have created multi-sectorial committees to implement the measures. Senegal's National Crisis Committee, for example, now has a 10-committee unit dedicated to Ebola prevention and containment. They have been working with the Ministry of Health and other key partners, including the Senegalese Red Cross and WHO, to engage in activities such as resource mobilization, media and communication, surveillance, logistics, security and clinical care. The Gambia has a similar seven-committee Ebola response unit, which works alongside the government and various health partners and NGOs to implement prevention measures.
Items such as soap, chlorine, gloves, disinfectant materials, medicines, medical equipment, and hygiene kits are being stocked in countries across the region. In Mali, protection kits have also been given to some of the volunteers who are involved in contact tracing and mass education campaigns.
Identifying isolation and treatment centres
Some treatment centres and isolation units in at-risk countries have been pre-identified, but not in sufficient numbers, say aid agency staff.
Cameroon now has isolation centres and laboratories in selected hospitals throughout the country, as well as a quarantine zone in the Southwest Region of the country, near the Nigerian border. The Gambia has also established three Ebola treatment centres: one in the greater Banjul area, the second in the country's "middle belt", and the third in the far east. Senegal has established an isolation unit and has testing facilities at its Institute Pasteur, as do the Institute Pasteur in Côte d'Ivoire and laboratories in Mali. Guinea-Bissau has not yet identified isolation units.
Border closings and surveillance measures
Despite strong recommendations by WHO not to close borders, or to restrict travel to or from the affected countries, seven African countries have decided not to allow anyone from an Ebola-affected country in or out. Senegal and Côte d'Ivoire, for example, have shut all land, sea and air borders with Guinea, Sierra Leone and Liberia. Guinea Bissau has closed its land borders with Guinea, and Guinea, in an attempt to contain the outbreak, has shut its land borders with Sierra Leone and Liberia. Cameroon has also closed its land and air borders with Nigeria though refugees fleeing Boko Haram attacks have been crossing the border.
All countries in the sub-region now have health workers posted at all main border crossings and points of entry, including the airports, where incoming travellers are screened for Ebola-like symptoms.
In Nigeria, where 21 cases have been confirmed, health workers are also going around communities to check people's temperatures and seek out the sick. Many schools, shops and restaurants now have handwashing stations set up outside their doors.
"It has become an everyday sight to see temperature-taking devices both at major border crossings, as well as hospitals and offices," said O. Nwakpa, of the Nigerian Red Cross. "They take our temperature and give you hand sanitizer each time you enter a building."
In Mauritania, not only do incoming travellers go through health checks, but outgoing travellers do as well, as the capital, Nouakchott, is considered a "last stop" before Europe.
Many communities in border areas most at risk have also created neighborhood watch programmes, in which people are encouraged to report anyone who shows Ebola-like symptoms.
Countries, such as Burkina Faso and Senegal, have set up toll-free numbers for people to call and report suspected cases.
Restricting public gatherings
To avoid potential bodily contact, many countries, such as The Gambia, have restricted or prohibited large public gatherings.
In Burkina Faso, the government has cancelled important high-level meetings, including the African Union Employment and Poverty Reeducation conference, which was scheduled to be held in the first week of September.
NGOs and health volunteers across the region say they have stopped performing educational theatre sketches on Ebola for fear of encouraging crowds to gather.
jl/bo/aj/cb100645 201407311238290807.jpg News Health West Africa gears up to contain Ebola IRIN DAKAR/OUAGADOUGOU Burkina Faso Benin Côte d’Ivoire Cameroon Cape Verde Gabon Ghana Gambia Guinea Equatorial Guinea Guinea-Bissau Liberia Mali Mauritania Niger Nigeria Sierra Leone Senegal Sao Tome and Principe Chad Togo Samoa West Africa Africa