The Gambia and Guinea-Bissau are among a handful of countries in the world that rely on remittances for at least 10 per cent of their GDP.
Speaking at the opening session of the Global Forum on Remittances, Investment and Development (GFRID) in Kenya yesterday, Álvaro Lario, the president of the UN’s International Fund for Agricultural Development (Ifad), said Africa is of particular interest at the 2023 GFRID, as 17 out of its 54 countries rely on remittances for at least 4 per cent of their GDP with The Gambia and few others exceeding the 10 per cent threshold.
The findings were outlined in the newly released RemitSCOPE Africa outcome report, which presents the most up-to-date and reliable data on remittances and their impact across all 54 African countries. The report sheds light on the over US$100 billion that annually flow into Africa from its migrant workforce of over 40 million individuals worldwide.
According to RemitSCOPE, the cost of sending remittances to Africa has been significantly reduced. However, with an average price of 8.85 per cent transfer fee to send US$200 last year, the continent remains the most expensive region in the world to send money to. Africa remains far from the 3 per cent target set in the SDGs to be achieved by 2030. Sending money within Africa is even more expensive at 11 per cent transfer fee on average.
Financial inclusion has significantly increased in Africa, rising from 20 per cent in 2011 to 51 per cent in 2021, driven largely by the growing ownership of mobile money accounts, says the report.
The president of Ifad reaffirmed his fund’s commitment to make the remittances flow faster, and safer while reducing transfer fees.
He said while migrants mostly send money to cover basic needs, it is estimated that recipients manage to either save or invest 25 per cent of the money they receive. One-quarter of these savings (US$25 billion annually) goes into agriculture-related investments. This amount is four times greater than the global Overseas Development Assistance (ODA) allocated to agriculture in developing countries.
Since 2006, Ifad has co-funded over 70 projects in more than 50 countries focused on providing opportunities for remittance-receivers and their communities. Ifad has built a network of some 230 partners on the ground from the public sector, private sector and civil society, benefitting at least two million people.
