"Thinking Back Home": Determinants of remittance flow among Ethiopian immigrants in Sweden. A qualitative insight

Abstract: Remittance as a direct cash reimbursement for “brain drain” stood as the main source of hard currency for many countries including Ethiopia and it is becoming an inevitable for development especially for those which are suffering in short of hard currency. This research is done with the preliminary premises that the formal remittance flow to Ethiopia is relatively low against the stock of emigrants, with its East African competitors and with SSA standards; the migrants’ channeling patterns has affected this. To examine these premises, the research has investigated the determinants of remittance flow from the remitters’ perspective utilizing qualitative method. Ethiopian national policy reactions towards remittance are also evaluated in relation to these remittances from abroad. This was made with the help of the micro and macroeconomic determinants of remittance. The application of depth interviews have revealed a new insight to the remittance business which is not explicitly found in the quantitative researches, as Ethiopian migrants indicate socioeconomic obligation as the main reason for their remittance. Whereas, lower accessibility of financial institutions on the receivers’ side, lower competition among money sending agencies in the remitters’ side, high transaction cost, higher exchange rate differentials which resulted to the wider availability of the “invisible channel” are responsible to the relatively low remittance flow through the formal channels which in turn proves the premises of this research. This is a mere insight to the complex nature of remittance with regards to Ethiopia.