BANENGAI KOYAMA Torcia Chanelle,Central African Republic,MFGD Would you clarify on the taxes that these governments are imposing on diaspora contributions? I see it difficult given the capacity of tax administration systems in African countries. See my thinking below:

I agree with you on the significant roles of remittances - but due to the informality of the channels that the diaspora use in remitting funds to left-behind households, i believe it would be difficult for governments to succeed at this. In addition, i believe the more they attempt to tax these formal channels, the more the informal channels will present themselves - which would lead to reduced formal tracking of remittances by government albeit people still increasing the volumes. At the macro-level, this problem in the external sector will present spill-over problems to the real, financial, and public sectors. In Malawi for example, this presents data accuracy issues by central banks (research loses validation), presents an informal black market for forex (people create forex markets on social media), and limits forex availability (forex does not go through banks) (this ofcourse will have many other consequences for import dependent countries).