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The Impact of Regulatory Structures on African Remittance Flows

Posted: 14 Apr 2013  

Neal Estey

Boston University

Date Written: April 14, 2013


In many African countries, remittances play a central role in stabilizing economies and enhancing human security. There are a variety of mechanisms through which an individual in one country transfers funds to family members in another country. Some transfers occur through formal institutions, such as banks, and some through informal channels, such as hawala common throughout North Africa. One of the leading issues that impacts an individual’s choices is the regulatory structure governing money transfers. This issue is important in the remittance sending and receiving countries. On both ends of the transactions, there are compliance issues associated with money laundering or terrorism financing concerns. But there are also taxes and other regulatory burdens that often drive remittances into informal channels. What regulatory structures, then, pose the greatest challenges to remittances, and what regulatory structures promote the greatest benefits to all stakeholders? The paper explores these questions with regards to remittances flowing into Africa from developed countries, but also considering regional remittance flows within Africa, building on comparative research on remittance regulations throughout the continent. With the proper regulatory mechanisms, these flows can be greatly increased and enhance the well being of individuals and communities throughout Africa.

Suggested Citation

Estey, Neal, The Impact of Regulatory Structures on African Remittance Flows (April 14, 2013). Available at SSRN:

Neal Estey (Contact Author)

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

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