Growth in African remittances is expected to slow due to the sluggish growth in Europe, the impact of weak oil prices in the Middle East, the depreciation of the euro and the tightening of migration controls in many remittance source countries
Countries with a large population of migrants could harness the potential of remittances to develop their financial sector and spur investment and growth. Several African countries are tapping into the pool of remittances’ funds by issuing bonds for investments in their homelands. Money raised through diaspora issues could be used to finance projects of interest to overseas migrants, such as housing, schools, hospitals and infrastructure. According to the African Development Bank, Africa could potentially raise US$17bn/year by using future remittances as collateral. Remittances to all of Africa are expected to grow to US$65.7bn in 2016.
Of an estimated 23.2mn migrants from sub-Saharan Africa during 2015, over a quarter live in OECD countries and two-thirds in Africa.
The largest home countries of migrants were Burkina Faso, DR Congo, Cote d’Ivoire, Nigeria, Somalia, and Sudan. Africa hosted 18mn migrants, with the majority going to Cote d’Ivoire, Ethiopia, Kenya, Nigeria, and South Africa.
Developed countries dominate remittances to Africa, but African countries like Cameroon (US$2.4bn in 2015), Cote d’Ivoire (US$1.3bn), and South Africa (US$1.1bn) transferred large remittances to other African countries. Four countries account for nearly half of remittances sent to Africa: the United States (US$8.4bn), Saudi Arabia (US$8.3bn), France (US$6.9bn), and the United Kingdom (US$5.2bn). Bilateral remittances to Africa amounted to US$63.8bn in 2015. Low-income countries such as Liberia, Gambia, Comoros and Lesotho received the largest amount of remittances as a share of GDP.
Official remittances to African countries are unevenly distributed, with North African and West African countries receiving 49.5 and 40.8 per cent, respectively, of total 2014 flows.
Remittances to North Africa were expected to remain stable in 2015, rising to US$31.7bn. They are expected to reach US$32.1bn in 2016, according to the World Bank.
Remittances to sub-Saharan Africa during 2015 were estimated at US$32.3bn and are expected to reach US$33.6bn in 2016. Nigeria alone accounts for about two-thirds of total remittances to sub-Saharan Africa, but these are estimated to have remained static in 2014 and 2015 at roughly US$21bn. In percentage terms, there was strong growth in Kenya (10.7), South Africa (7.1) and Uganda (6.8). Remittance dependency varies. In Gambia, Lesotho, Liberia and Comoros remittances equalled about one-fifth of GDP in 2015.
