Role of remittance inflows to the development of Woreda, Ethiopia

Julie Ashenafi, Birtukan Haile

Abstract

Migration is one among the many livelihood strategies that households employ to diversify their sources of livelihood. Remittances that are channeled by migrants play an important role in improving the living standard of households, and reducing their level of vulnerability. This study discusses the impact of international remittance on the livelihood of the rural poor in Tehuledere Woreda, Northeastern Ethiopia. Qualitative and quantitative data have been generated for the study. The methodology employed structured household surveys, key informant interviews and individual narratives from case studies. Results indicate that households with different demographic and socioeconomic characteristics are beneficiaries of remittances. There has been considerable change to household consumption, asset accumulation and investment among recipients. Therefore, remittances have had profound impact on reducing the vulnerability of culprits of various hazards. Neighboring families and/or friends have also benefited from these remittances during time of need. On the other hand, there is evidence that in certain cases remittance triggers conflict among members of the receiving households. To assure sustainability, some recommendations have been made. First, households of remitters should strive to engage in diversified livelihood activities to reduce their dependency on remittances. Second, the transaction cost of money transferred needs to be reduced. Thirdly, the society needs to develop the culture of savings and investment than mere consumption. Fourthly, there should be efficient and effective access of financial intermediaries that can deliver remittance services to individuals at the right time at a reasonable service fee