ADDIS ABABA, Aug. 24 (Xinhua) -- The International Organization for Migration's (IOM) said as much as 78 percent of total remittances may currently be sent to Ethiopia through informal channels in some corridors.
A IOM report "Scaling-up Formal Remittances to Ethiopia", which was launched on Thursday, stressed that the finding "represents both a major opportunity and a major challenge" for the east African country.
Ethiopians have sent home as much as 3.5 billion U.S. dollars in 2014/2015, approximately 7.4 percent of the country's GDP, according to figures from IOM.
"While the government has made great strides in recent years to increase the flow of formal remittance, evidence suggests that informal networks remain a prominent way for Ethiopians to send money home," the report said.
"This represents a major challenge since remittances sent through informal channels not only pose a risk to the consumer, but also reduce opportunities to encourage the financial inclusion of migrants and their families as well as their investment," the report added.
The report further asserted that informal flows lead to a loss of foreign exchange for the Ethiopian government and undermine efforts to avoid money laundering as well as combating the financing of terrorism activities.
Maureen Achieng, Chief of Mission IOM Special Liaison Mission to Ethiopia and Representative to the AU, UN-ECA and IGAD, indicated that an estimated 465 billion dollars are expected to flow into developing countries in 2017 in remittances.
Achieng said both the receiving community and the Ethiopian government could benefit better from remittance "if some of the persisting barriers are mitigated such as high transaction costs that lead to a large percentage of informal remittance inflows, estimated at nearly 78 percent for Ethiopia."