A money changer counts Nigerian currency notes for a customer in Nigeria's commercial capital, Lagos, March 16, 2020. (Photo File/Temilade Adelaja)

Remittances flow to SS Africa Up by 1.9% to $54bln

Remittances flow to Sub-Saharan African countries estimated to have reached $54 Billion in 2023, showing a slight increase from the gain last year.

The increase was driven by strong remittance growth in Mozambique (48.5%), Rwanda (16.8%), and Ethiopia (16%), the World Bank says today.

Its latest Migration and Development Brief estimates remittance inflow to the region to show a 1.9% growth from $53 billion in 2022 to $54 billion this year.

The slowed growth is explained by the slow pace of growth in the high-income economies where many Africans earn their income.

Still, the report notes that remittance inflow surpassed the foreign direct investment (FDI) and official development assistance (ODA) flows.

“Remittances are one of the few sources of private external finance that are expected to continue to grow in the coming decade,” Dilip Ratha, lead author of the report, said. “They must be leveraged for private capital mobilization to support development finance, especially via diaspora bonds.”

SS Africa’s top three recipients

The largest recipients of remittances in the region during 2022 – measured in US dollar terms – include Nigeria, Ghana, and Kenya.

The same countries dominate the top three recipients this year too.

Nigeria is expected to receive more than $20 billion in official remittances by the end of 2023, showing a 2% increase from last year. Ghana and Kenya posted estimated gains of 5.6% and 3.8%, respectively.

In terms of its share of GDP, the Gambia has the largest share, followed by Lesotho, Comoros, Cabo Verde, Guinea-Bissau, and Zimbabwe.

Remittance Inflow to continue Growing in 2024

Remittances to Sub-Saharan Africa will keep increasing next year albeit at a slow pace.

World Bank’s report projects the remittances to the region to reach $55 billion by 2024 but says there are risks to this outlook including measures to control foreign exchange, parallel markets, and sanctions.

The cautious projection comes amid fixed exchange rates and capital controls continue to divert remittances to the region from official to unofficial channels.

Globally, the concern is the risk of a decline in real income for migrants in 2024 in the face of global inflation and low growth prospects.