Diaspora remittances fuel Africa's growth in sustainable ways

KCB Foundation Chairman Catherine Kola KCB Group CEO Joshua Oigara Richard Malcolm, Western Union, Regional Vice President for South and East Africa Erastus M. Kiugu Chairman National Education Board in the ministry of Education, Science and Technology Western Union Foundation and Kenya Commercial Bank Foundation collaboration to provide full scholarship for secondary school students in Kenya. ...during the KCB foundation and western Union union Foundation partnership signing ceremony at the Stanley Hotel, Nairobi. [Courtesy]

Remittances may be measured through movement of money, but their real impact is measured in lives changed. Africa's diaspora, projected to make up over 25 per cent of the global population, is a formidable force rewriting the migration narrative.

While migration is often viewed through the lens of departure, the real story lies in the connection that binds people across borders. These connections fuel economies, empower communities, and transform lives. Where people go, remittances follow. In 2023 alone, USD90 billion flowed into Africa from its global diaspora, an amount that rivals the GDP of entire nations. However, a more important question emerges: What do remittances mean for Africa's future?

Remittances symbolise deep ties that keep communities connected across borders. Families with a breadwinner working abroad depend on these funds to provide vital support for day-to-day needs. They also build the foundation for broader financial stability.

Beyond their immediate impact, remittances are powerful drivers of economic change. They fuel infrastructure development, spur entrepreneurship, and promote financial inclusion - all essential for long-term economic development. Ghana's National Financial Inclusion and Development Strategy (NFIDS) is simplifying access to remittances, while countries like Kenya, Ethiopia and Nigeria are tapping into diaspora bonds to fund infrastructure and other national projects.

On a macro-level, remittances play a pivotal role in advancing several United Nations Sustainable Development Goals (SDGs). They boost food supply and healthcare services, promote equality, accelerate climate action, enable access to education and clean water. Across countries, remittances are shaping policies aligned with these goals. In Kenya, for example, remittances are a top foreign exchange earner, stabilising the currency and economy. Morocco is driving financial inclusion through digitisation, ensuring reliable digital payments. These efforts directly contribute to SDGs by boosting industry and economic growth, as well as reducing inequality.

In a continent renowned for its entrepreneurial spirit, offering multiple channels for remittance access is key. Whether through bank accounts, digital wallets, mobile money apps, or cash pickups, this flexibility ensures that funds are delivered in ways that best suit local realities. Providing innovative and inclusive solutions empowers individuals to not only manage their immediate needs but also to invest in long-term growth opportunities.

Equally vital to this ecosystem is strategic collaboration. Organisations such as the African Development Bank, the African Union and the World Bank have developed strategies and solutions to simplify processes and unlock new growth opportunities. These efforts amplify the potential of remittances, ensuring that funds are not only received efficiently but invested wisely as well.

This is where the cycle begins, ultimately transforming remittances into a critical driving force behind social and economic prosperity. Every remittance is a seed of change - a deliberate investment in a future where borders blur. The future of remittances in Africa transcends mere financial support.

The writer is Regional Vice President of Africa at Western Union