APA-Addis Ababa (Ethiopia) Remittances flow to Sub-Saharan African countries estimated to have reached $54 billion in 2023, showing a slight increase from the earnings last year.
The increase was driven by strong remittance growth in Mozambique (48.5%), Rwanda (16.8%), and Ethiopia (16%), the World Bank said on Monday in a statement.
Its latest Migration and Development Brief estimates remittance inflow to the region to show a 1.9% growth from $53 billion in 2022 to $54 billion this year.
The slowed growth is explained by the slow pace of growth in the high-income economies where many Africans earn their income.
Still, the report notes that remittance inflow surpassed the foreign direct investment (FDI) and official development assistance (ODA) flows.
“Remittances are one of the few sources of private external finance that are expected to continue to grow in the coming decade,” Dilip Ratha, lead author of the report, said. “They must be leveraged for private capital mobilization to support development finance, especially via diaspora bonds.”
The largest recipients of remittances in the region during 2022 – measured in US dollar terms – include Nigeria, Ghana, and Kenya.
The same countries dominate the top three recipients this year too.
Nigeria is expected to receive more than $20 billion in official remittances by the end of 2023, showing a 2% increase from last year. Ghana and Kenya posted estimated gains of 5.6% and 3.8%, respectively.
In terms of its share of GDP, the Gambia has the largest share, followed by Lesotho, Comoros, Cabo Verde, Guinea-Bissau, and Zimbabwe.
Remittances to Sub-Saharan Africa will keep increasing next year albeit at a slow pace, said the report.
World Bank’s report projects the remittances to the region to reach $55 billion by 2024 but said there are risks to this outlook including measures to control foreign exchange, parallel markets, and sanctions.
MG/abj/APA