Foreign Inward Remittance Practices In Ethiopia

Abstract

This thesis was designed to investigate foreign inward remittance practices in Ethiopia, through searching for the purpose of foreign inward remittance, so as to pave the way for the exchange rate fluctuation, foreign currency shortage and black market problems in this country. With the same case, the thesis could be used as input for Banks in Ethiopia, especially for commercial bank to mobilize foreign currency through foreign inward remittance. The study was engaged on Three Branches of Commercial Bank of Ethiopia, namely: Wolmera Branch (from Holeta town), as well as Airport Branch and Diaspora Branch from Addis Ababa, (the capital city of Ethiopia).The data used to engage this thesis was both primary and secondary data. The primary data was collected using Questionnaire and face-to-face Interviews and Secondary data’s were collected from NBE and CBE. Descriptive research design was used to meet the objectives which was ascertained and verified in both qualitative and quantitative research approach. The targeted population for the study in which the raw data was collected relied on CBE customers who was categorized in to two group namely foreign inward remittance receiving customers (who was receive 300 USD and above) from Wolmera branch and foreign inward remittance senders (Diasporas) from Diaspora branch and Airport branch. Census of 90 populations was taken: From these, 30 of them were from Wolmera branch (for foreign inward remittance receiving customers) and 60 of them (for foreign inward remittance senders) (Diasporas). All the populations were part of respondents without sampling, since a census was undertaken. Census was used instead of sampling due to the fact that it was difficult and complex to determine the total number or population of Diasporas and customers came to above mentioned study area (CBE: wolmera branch, airport branch and diaspora branch) per day, per month or per year. Especially the current outbreak of pandemic covid-19 corona virus worldwide which limits the movement of peoples from place to place or from country to country made the judgment of this study population complex. That was why Census was preferred. As a result of this thesis, it was identified that most Diasporas sent foreign inward remittance to support their family in covering basic household Consumption. The xii study also tried to assess the effect of COVID-19 in Foreign Inward Remittance to Ethiopia. The study was conclude that the introduction of evidence-based appraisals, efforts to enhance transparency in allocation and the management of foreign currency exposure in banks and the identification of mechanisms to further encourage private transfers to flow through formal channels, with government authorities disposed to shifting the engine of economic activity to the private sector, businesses require an enabling environment which can sustain Ethiopia’s impressive economic trajectory. Finally the study recommended: to minimize the problem of informal black exchange market, the government should strongly work with different stake holders, mainly with Banks and business owners, as well as recommend that the Diasporas should also engage in bulk on investing on their homeland Ethiopia than sending foreign inward remittance to support their family in basic household consumption. Five key words of the thesis: remittance, diaspora, senders, receivers and money transfe