When it comes to the critical role of remittances, it’s hard to overstate the impact in African nations and the trend only continues to grow. For Gambians, such remittances – money sent home to families from loved ones working abroad – accounted for 15.1 percent of GDP in 2018.
That’s according to the latest World Bank numbers, which reflect that remittances account for more than 10 percent of GDP in Egypt, and in both island nations of Cabo Verde and Comoros. In Liberia, the remittances account for 12 percent of GDP. In Lesotho, it’s 14.7 percent.
An April 2019 analysis of World Bank data from Pew Research found sub-Saharan Africans sent US$41 billion home in 2017, a 10 percent increase from the previous year and the largest jump in the world.
That money is making a difference in the lives of individual families, most of which is needed to cover essentials, but also in the life of nations.
Yet Africans abroad pay the highest rates in the world to send money home. The costs to send money to the region average 9.4 percent of the transfer amount, according to the International Organization for Migration, which recently held a Ghana conference on remittances and their role in development.
That’s nearly a third more than what the rest of the world pays, and well beyond the goal of reducing the costs to 3 percent by 2030 under the United Nations Sustainable Development Goals.
Ecobank CEO Ade Ayeyemi, speaking recently in London, said technology is helping to lower the cost of unacceptably high remittance costs, which are now in the zero to 3 percent range on some mobile transfer platforms. Yet there’s a long way to go to bring fees in line with the rest of the world, and prevent the losses to African nations.
Image: IOM file