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Time of India
3 days ago
- Business
- Time of India
Trump remittance tax to hit Africans hard
Representative AI image For Enoch Aikins, a political economist who focuses on Africa, the topic of sending money home to relatives is personal. "I can use myself as an example, as somebody that comes from a typical village with a lot of people or [with] a family that depends on me," he told DW. A researcher with the Institute of Security Studies now based in Pretoria, South Africa, Aikins grew up in the small town of Agona Kwanyako, about 70 kilometers (some 43 miles) from the Ghanaian capital, Accra. His job means he can provide a vital source of income for many in his family back home in Ghana, whether it be for his mother's medical bills or for his cousins' education. "Anytime there's a family problem, they call me and I have to quickly find a way to send money to them to solve an emergency crisis," he said. "Mostly it is household expenses, things like food, accommodation, school fees or to cover medical expenses." A global impact Aikins is one of many millions of Africans across the continent and around the world who send remittances, which are financial transfers to their home country or region. The importance of these financial transfers has come into sharp focus as a result of the recent tax bill from US President Donald Trump, passed on May 22 by the House of Representatives. The measure includes a 3.5% tax on remittances made by anyone who is not a US citizen or national. The original plan was for the tax to be 5% but it was lowered before the vote. The bill has led to fierce criticism across Latin America, where it is likely to severely hurt poor migrants from Mexico, Central and South America. Africans will also be significantly affected, according to Aikins. "We cannot tell them how to go about their fiscal business, but this is going to have a huge impact on African economies." World Bank data shows that remittance flows into Africa were more than $92 billion (€81 billion) in 2024, with the United States alone accounting for at least $12 billion in that year. According to World Bank, the US is also the largest origin country for all remittances in the world, accounting for more than $656 billion in 2023. Monica de Bolle, a senior fellow at the Peterson Institute for International Economics in Washington, DC, said, however, here is a lack of reliable data on remittances because so much is not sent via recorded transactions. "People have different arrangements for sending money back home," she told DW. "Sometimes it's as official as a family member comes and visits and then they get a wad of cash and they go back home with that. And those kinds of transactions are simply unaccounted for." N onetheless, whatever data is available, she argued, underlines the importance of the US as a source of remittances for Africa and much of the Americas. How important are remittances for Africa? Remittances are important across Africa for three key reasons. Firstly, they represent a major chunk of income for many of the continent's economies, many of which are among the world's poorest. Recent data suggests annual remittances now outweigh both aid and foreign direct investment (FDI) as income flows into the continent. Aikins said remittances are the "largest external financial flow into Africa" at the moment. "There are no bottlenecks or administrative issues that, for instance, if you are giving aid of about $100 million to an African country or an institution, more than half is gone on administration before it reaches people," he added. Then there's the fact that it's typically lower-income groups that are most reliant on remittances from relatives or friends working abroad. "It's extremely damaging," said Monica de Bolle. "A lot of the time, these flows are coming from low-income folks in the United States to their home countries and their families who are also not well off." Some African countries will be hit harder than others. While the continent's big economies, such as Egypt, Nigeria, and Morocco, account for the highest total level of remittances from abroad, some economies are especially dependent, according to Aikins. World Bank data shows that remittances received as a percentage of GDP is around 20% for Lesotho, Comoros, Somalia, Gambia, and Liberia. 'Taking money out of people's pockets' De Bolle is critical of the remittance levy and thinks migrants will find ways of avoiding the tax. "People who are sending money back home, if they were using official channels to do this, they're now going to try to use unofficial channels to do it because they will want to evade the tax." She points out that taxation of remittances is rare globally and thinks the policy is part of the Trump administration's campaign against illegal migration. "The effect will be squeezing the migrants, squeezing the people who are currently living in the United States, shutting off mechanisms by which not only they sustain themselves, but they sustain their family members," said Bolle. "Bottom line is that remittances are a pocketbook issue. You are taking money out of people's pockets." Aikins' remittances won't be taxed, as they are not coming from the US. Yet he can clearly imagine the real-life consequences for someone in a village like the one he grew up in who is dependent on a relative sending money from the US. When he gets a request for money, it's needed quickly, and he thinks migrants will turn increasingly to cryptocurrency and other off-grid methods to send the money where it needs to go. "The tax is going to have a tremendous effect on how people send money to their dependents back home."
The Guardian
16-04-2025
- The Guardian
US pastor kidnapped during sermon in South Africa rescued after shootout
South African police have rescued an American pastor who was abducted last week while he was conducting a sermon, as kidnappings have soared over the last decade in the country. Three unidentified suspects were killed during the 'high-intensity shootout' on Tuesday in which Joshua Sullivan, a missionary from Tennessee, was rescued, the Hawks, the police unit that deals with serious crime in South Africa, said in a statement. Kidnappings in the country have more than trebled in the past decade, according to police statistics, with 17,061 recorded in the year to March 2024. South Africa, one of the world's most unequal countries, also has one of the world's highest murder rates, with more than 27,000 that year, 50% higher than a decade earlier. Sullivan was seized on Thursday night while he was preaching at the Fellowship Baptist church, where he had been a missionary since 2018 in the township of Motherwell outside the city of Gqeberha in Eastern Cape province. Four gunmen stormed the church, stealing two mobile phones from congregation members before taking Sullivan. A few hours later, his truck was found abandoned. The kidnappers were eventually tracked to a house in KwaMagxaki, around a 20-minute drive from the church, across the Swartkops River. Suspects inside a vehicle opened fire while attempting to flee, the police said. The Hawks statement said: 'The victim was found inside the same vehicle from which the suspects had launched their attack. Miraculously unharmed, he was immediately assessed by medical personnel and is currently in an excellent condition.' Sullivan's mother, Tonya Morton Rinker, said in a Facebook post: 'My Baby is free! Joshua was rescued earlier today!! He is home with Meagan and the kids… Thank you for your support and prayers.' An earlier post by Rinker described Sullivan as a 'big-hearted gentle giant'. It said the 34-year-old had first travelled to South Africa with his wife Meagan for six months in 2015, before returning as 'church-planting' missionaries and becoming fluent in Xhosa, the most common language in the Eastern Cape. The couple have four children and have 'taken in two Xhosa children'. A report by the Institute of Security Studies, a local thinktank, found 44% of kidnappings were during vehicle hijackings to extort money quickly. Another 22% were tied to robberies, while only 5% were for ransom. It was not immediately clear what the motive for Sullivan's kidnapping was. Additional reporting by Associated Press
Washington Post
16-04-2025
- Washington Post
A US pastor abducted in South Africa has been rescued after a police shootout
JOHANNESBURG — An American pastor who was kidnapped last week by armed and masked men during a sermon in the Eastern Cape province of South Africa was rescued on Tuesday after three of his abductors engaged in gunfire with officials and were killed, police reported Wednesday. The 45-year-old American citizen, Josh Sullivan from Tennessee, has been based in the Motherwell township branch of the Fellowship Baptist church since 2018 alongside his wife and two children. The missionary was abruptly abducted on Thursday evening when four men broke into the Fellowship Baptist church in Motherwell. They stole two cellphones from members of the congregation before seizing Sullivan from the pulpit and bundling him out of the building. His truck was found abandoned a few hours later. A multi-agency task force, including the Anti-Gang Unit and the Serious Organised Crime unit, took over the investigation. On Tuesday night they approached the location where they suspected Sullivan was being held, a house in KwaMagxaki, Gqeberha about 20 minutes' drive from the Baptist church. According to police, a shootout began when suspects in a car parked outside the house tried to escape and began firing at them. Three unidentified suspects were killed, police said. 'The victim was found inside the same vehicle from which the suspects had launched their attack,' Lieutenant Colonel Avele Fumba said in a statement. 'Miraculously unharmed, he was immediately assessed by medical personnel and is currently in an excellent condition.' The number of kidnappings in South Africa has risen by 264% over the past decade, police data showed. According to the Institute of Security Studies, a think tank specializing in Africa, kidnapping has become a key tactic in armed robberies and carjackings. In its latest Africa report, the ISS notes that less than 5% of kidnappings in South Africa involve ransom demands. Since his release, Sullivan, who describes himself as 'a church-planting missionary' on his personal website, has been reunited with his wife Meagan and their two children. A man named Tom Hatley, whom Sullivan describes on his personal blog as his childhood and training pastor, posted a picture of Sullivan and his family on Facebook. Explaining that he had received 'the go ahead to let it be known', Hatley said, 'Josh has been released.' 'Thank you for your support and prayers. Please do not stop praying for The Sullivans,' his post read. 'Also, PLEASE respect The Sullivans privacy and their parents. A lot of folks love The Sullivans, and they love you back, but give them some time.'
