Contribution of Remittance to Household Livelihood and Local Development: The Case of Gonder Town

Abstract

This study assesses the effects oJremittances obtainedJrom internatiollal migrants 0/1
household livelihood and its contribution to local development in Gonder Town. The
.)'Unlcy appraises fhe amOlmt and trends of remittance jlOII', mode oj tran.ifer. amounl
channelled 10 investment or locul development activities, cOn/ribltrion to employment
and sustainability oJhousehold economy. The sunrey employed mixed design to collect,
analyze. interpret and present data. 80th quantitative and quafiwtive data were
acquired u.~ing questionnaire, Jocused group disCliSsions and interviews Jrom
purposively selected three sample kebeles' 150 remillance recipient households were
selected using snow ball sampling method. Duta was also gathered from Ihe Natiollaf
Bank OJElhiopia and two branches oJCommercial Bank of Ethiopia found in Gonder
Town. Descriptive statistics was employed 10 analyze. interpret and present the dalu.
The findings showed there were large numbers of out.migrantsfrom Gonder Town and
the region. who have resided abroad. Reasons Jar out·migratlon were both poli(icaf
instability of the 1970s and 1980s and availability ofopporwnity to travel to the US
using DV loltery and employment opporlllnities in olher parts of the world. It was
fOl/lld that many migrants send remit/unces using for1/1Q1 and informal channels to
their parents, relatives and Jriendr. The amount of remitfa /lce received using the
informal channels is likely to exceed that of formal channels. 77Je amount of money
formally remiUed through the two branches of Commercial Bank of Ethiopia Jound in
Ihe area alone in the lasl two years was about 83.4 million ETB. The respondenu
reported that (he remiltances have conrributed considerably 10 improve livelihoods
and locul development. Abou136% oflhe remiflances were used for direct household
consumption while the remaining 64% was used for capacity building and expansion
of urban .~ervices and hence creare employment. Remiltances transferred f rom Ihe
Dia.~pora Jeem to have supported considerably local economic and infrastruclllre
developments of the city. Therefore. policy makers and civil societies should train.
gllide and advise remittance recipienls of the lown and the region at large how 10 more
producliveiy and efficiently use remiuonces.