Migration Informing Remittance in Africa

International remittance has continued to remain significant on the African continent. Senders remit funds back home for various purposes including food, health, education and family support during tough times. For many, sending money home assures a sense of responsibility and belonging to the motherland.

There has been an increase in migration stock from and within the African continent post the COVID-19 pandemic, mainly stemming from the economic constrains experienced in several countries. History has proven that, increase in migration results in the potential increase of remittances.

In most cases an individual will migrate and settle in a host country and invite family as well as friends to settle join. The largest source countries for migrants are Egypt, Morocco, South Sudan, Somalia, Nigeria, Cameroon, Eritrea and the Gambia. Migration within the continent still supersedes migration outside the continent.

Informed by the migration stock, Africans in the diaspora continue to increase the value of money sent back home. Remittance value has grossed USD 100.1 billion in Africa. This is an increase of 1.9% from the 2021 figure of USD 98.2 billion.

Remittance flows are a major contributor to the GDP of several countries hence the economic significance. This refers to countries like The Gambia, Comoros, Lesotho, Cape Verde and Guinea Bissau, where remittances represent more than 10 percent of GDP.

It is interesting to note that 65 percent of the total remittance flow was directed to Egypt, Nigeria and Morocco in 2022. With the major send countries being the United States, Italy, France, United Kingdom and Canada. Intra-Africa remittances have been on the rise since 2020.

While the above remittance performance is exciting, sending money in Africa is still very expensive. Some countries and regions have fees as high as 11 percent. Therefore, there is a long way to go in achieving Goal 10 of the Sustainable Development Goals.

Digital financial institutions such as Zeepay are leveraging international remittances to disrupt the mobile money ecosystem. Zeepay prides itself as an enabler in reducing remittance fees, breaking financial borders while increasing financial inclusion.

The future of remittance and payments is an interesting one, as several factors are taken into consideration to drive growth as well as sustainability. Among these are infrastructure and technological investments, proliferation in mobile wallet use and innovative disruption.

Source: RemitSCOPE Africa, World Bank