Africa’s diaspora remittances to grow 5,4% in 2024, market set to reach $500bn by 2035

Remittances to Africa and the Middle East, which play a pivotal role in many regional economies, significantly contributing to their GDP, are estimated to have increased 5.4% in 2024, primarily due to rebounded flows to Egypt, after a 14.6% decline in 2023.
In 2024, remittance flows to low- and middle-income countries are expected to reach $685 billion, according to data presented in a latest analysis in the World Bang Blogs. However, the analysis also points out that the true size of remittances, including flows through informal channels, is likely much larger. In smaller economies, including some in Africa, remittance inflows represent very large shares of gross domestic product (GDP), highlighting the importance of remittances for funding the current account and fiscal shortfalls. The growth n remittance flows has been driven by the recovery of the job markets in the high-income countries of the Organization for Economic Co-operation and Development (OECD), and especially the United States, following the onset of the Covid-19 pandemic.
As of 2022, the total value of remittances in Africa reached almost $100 billion, and accounted for an average of 7.6% of gross domestic product (GDP) in Western Africa, 6.8% in Eastern Africa, 4.4% in Northern Africa, 3.7% in Southern Africa, and 1.4% in Central Africa, according to World Bank. In Ghana, for example, remittance inflows in 2023 totaled $4.6 billion, significantly dwarfing the $649 million generated from foreign direct investment (FDIs) during the same period. Meanwhile, Tanzanian government has been reported to be stepping up efforts to engage one million diaspora workers by 2028 with the goal of doubling the annual contributions of Tanzanians abroad to $1.5 billion. Kenya currently leads the eastern African region in diaspora remittances that reached $437.2 million in October 2024, constituting the country’s largest single source of foreign currency. According to the DAI Magister, an investment bank, Africa’s remittance market should reach a valuation of $500 billion by 2035.