In 2015, Professor Mduduzi Biyase went back to Hlokozi village, a rural community in southern KwaZulu-Natal, where he grew up.
“I went there with a simple question: Does the remittance money that migrants send home make a difference to their families? Can it help lift them out of poverty?”
Prof Biyase was speaking at his inaugural lecture on Wednesday 11 November, at the Kingsway Campus of the University of Johannesburg (UJ). He is a researcher at the School of Economics, within the College of Business and Economics.
He remembers driving around and noticing that some of the homes had satellite dishes. Others had been renovated, clear evidence that money was arriving from different parts of South Africa: Pietermaritzburg, Durban, Johannesburg and Cape Town.
“Of course, some homes looked much the same as before, while others appeared to be getting worse,” he adds. “That difference, house by house, was the question I had returned to my village to answer.”
Migrants invisible in remittance data
Looking at the national remittance data, Prof Biyase and his collaborators noticed that many rural South African households had family members who were living and working elsewhere and sending money home. But they could not see who was sending the money, how much they earned, or how much they sent. And the pressures that shaped decisions to send money to family were simply not included in the data.
“The migrant was, in a very real sense, invisible in the remittance data,” he says.
To answer these questions, he conducted one survey with households in Hlokozi and another with their migrant family members, which together formed a matched survey.
Without remittances, the poverty rate in Hlokozi was 84%. When remittances were taken into account, it fell to 58%, a reduction of 26 percentage points.
“Behind those 26 percentage points are real families who use the money they receive to buy food, send their children to school and pay for electricity,” says Prof Biyase.
“Families rely on migration to build wealth. They also rely on the money migrants send home to cope with difficult times, such as when someone loses a job or a poor harvest leaves a family struggling.”
How families use remittances
As a next step in his research, Prof Biyase questioned whether poverty reduction from remittances was limited to Hlokozi. Could the same effect be seen across the country?
Some years after his doctoral studies, he wrote a chapter for the Oxford Handbook of the South African Economy with Dr Mark Collinson, using two nationally representative datasets covering nearly twenty years to answer the question.
They found that remittances still played an important role at a national level, but the effect depended on where the household sat on the income distribution ladder.
“For the poorest, the money goes into food and helps families cope with life’s shocks. For better-off households, it goes into education, healthcare or housing,” he says.
Remittances vs environmental impact
More recently, Prof Biyase, research collaborators and former students wanted to know whether the effects of remittances look the same at a regional level.
The team looked at the relationship between remittances and carbon emissions in the Southern African Customs Union (SACU) region of South Africa, Botswana, Lesotho, Namibia and Eswatini.
They asked whether more remittance income always has the same effect on the receiving family’s carbon emissions.
At lower levels of remittances, an increase in remittances was associated with an increase in carbon emissions.
“This makes sense because, when households receive more money, they can spend more on goods, electricity and fuel,” says Prof Biyase.
“But we found a point beyond which an increase in remittances was associated with a decrease in carbon emissions. Larger amounts of remittances may give households more room to invest in cleaner technologies and renewable energy. This could help reduce carbon emissions.”
The team found similar evidence in Kenya. A study on India in collaboration with the University of Manchester is still in progress.
The global remittance network
In work in progress with Prof Saralees Nadarajah at the University of Manchester, Prof Biyase is examining remittances as a global network.
“We ask which countries occupy the most important positions in the global remittance network, and how countries are connected through these flows,” he says.
Emerging results show that the global remittance network covers an estimated 213 countries and 12,667 one-way flows.
The top five senders are the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom and Canada. The top five receivers are India, China, Mexico, the Philippines and France.
“South Africa appears among the senders,” he adds. “This isn’t surprising, because it sends a lot of money to its neighbouring countries, such as Lesotho, Eswatini and Botswana.”
Nigeria and Egypt are among the top receiving countries in Africa.
The researchers asked the software to group all the countries in the global remittance network into regions, and six regions emerged. In their analysis, countries that are neighbours on the physical map are also neighbours in the remittance network.
The next question he wants to investigate, is whether a country’s position in the global remittance network makes a differences to its development outcomes.
“We need to ask: Who and what gets counted? And at what level are we counting, to assess the impact of remittances on household poverty, household carbon emissions and regional development?”
Concludes Prof Biyase: “We should never assume that one result tells the whole story.”
