The growth of digital and mobile penetration across the continent has contributed to the growth in remittances.
Leading mobile payments company WorldRemit saw a 43% growth in remittances to Africa from higher-income nations in 2019.
The top five countries receiving remittances from the diaspora in 2019 included Ghana, Kenya, Uganda, Zimbabwe, with Nigeria receiving the most remittances. The top sending countries to the region included the United States, Australia, Canada, and Sweden, with the UK sending the most remittances.
The diaspora plays a key role in Africa’s development story, today the value of remittances is three times larger than official development assistance (ODA) and forecasted to become higher than foreign direct investment for a handful of African countries in 2019.
WorldRemit has disrupted an industry previously dominated by offline legacy players by taking international money transfers online – making them safer, faster and lower-cost. We currently send from 50 to 150 countries, operate in 6,500 money transfer corridors worldwide and employ over 800 people worldwide.
On the sending side, WorldRemit is 100% digital (cashless), increasing convenience and enhancing security. For those receiving money, the company offers a wide range of options including bank deposit, cash collection, mobile airtime top-up, and mobile money.
The growth of digital and mobile penetration across the continent has contributed to the growth in remittances. WorldRemit has and continues to partner with both mobile money and bricks and mortar agents to increase accessibility to all our customers regardless of whether they are in a city or a remote village on the continent.
In addition to digital growth within the continent, the diaspora is also changing its pattern of frequency, value, and reason for sending money back home. Apart from the traditional reasons for sending money to their native countries, members of the diaspora are increasingly looking at ways to be part of what is happening “back home”.
A great example is Ghana. In 2019, after the launch of the Year of Return, Ghana extended citizenship to over 100 African-American’s as well as enacting the Immigration Act which provides for a “Right of Abode” for any “Person of African descent in the Diaspora” to travel to and from the country “without hindrance.” After a successful 2019, President Akuffo-Addo launched a new initiative “Beyond the Return” which is a drive to see people from the diaspora invest in Ghana via business start-ups, property acquisition, relocating or investment vehicles which the government is setting up.
At WorldRemit, it is important to continue to remain affordable, fast, simple, secure and accessible for the growing market and ever-changing dynamic continent.
Remittances to low- and middle-income countries reached a record high in 2018, according to the World Bank’s latest Migration and Development Brief.
The Bank estimates that officially recorded annual remittance flows to low- and middle-income countries reached $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017. Global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017.
Africa has one of the world’s most mobile populations, and African nations account for a large and growing slice of the global remittance market. When it comes to infrastructure, Africa has an important advantage that can propel remittances across the continent and promote financial inclusion – namely, mobile money. Africa was an early adopter of mobile technology and digital wallets, with M-Pesa blazing the trail in Kenya and beyond. It has been followed by other mobile initiatives and there is now a firm foundation to support the African diaspora.
While digital transformation is helping the flow of money and connecting more people in more African corridors, cross-border transactions face many security measures and restrictions to prevent money laundering and terrorist financing.
Source: The Exchange