Sending currency through the diaspora: here is the amount transferred by Algerians

Sending currency through the diaspora: here is the amount transferred by Algerians

Africa is rich in its diaspora. A large number of nationals from African countries transfer several thousand dollars to their countries of origin each year from the foreign countries where they work. With significant disparities, depending on the country.

In 2023, foreign exchange remittances from diasporas in Middle Eastern and North African countries fell by 15% to $55 billion. Moroccans transferred $11.8 billion last year, a figure up 5.2% compared to 2022.

As for Algeria, the latest World Bank report indicates that it benefits “on average only about $1.8 billion each year over the past decade.”

How can we explain such a level of sending when the Algerian diaspora is one of the largest abroad? In reality, this World Bank figure only covers amounts that pass through an official transfer channel.

Are Algerians transferring too little currency to Algeria?

Indeed, the World Bank report highlights “the existence of a black market” in Algeria which offers an exchange rate “30 to 40%” more advantageous compared to official rates.

Indeed, there is a gaping difference between the official exchange rate, set by the Bank of Algeria, and black market prices, guided essentially by supply and demand.

This pushes Algerians abroad to quickly make their choice: to send their money through the black market which offers a more advantageous rate. Currently, one euro is exchanged for 240 Algerian dinars on the parallel market compared to only 143 dinars at the bank, a difference of almost 100 dinars.

The World Bank thus indicates that this situation “suggests that a significant volume of funds can take informal channels” towards Algeria, referring in particular to the transfer of currencies by travelers.

Indeed, Algerian expatriates rarely pass their currencies through banks and are not used to declaring their currencies to Customs when arriving in the country from abroad.

A black market estimated at between 5 and 6 billion euros per year

Each year, members of the Algerian diaspora in France bring significant funds into Algeria in euros, mainly via ports and airports.

The significant gap in the exchange rate deters the majority of Algerians abroad from making bank transfers, preferring to transport their currencies themselves and exchange them on the black market.

Thus, and in addition to transfers that go through official channels, it is estimated that Algerians abroad send between 4 and 6 billion euros to their country of origin each year via the black market.

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