Remittances to Africa

The document analyzes remittance flows in Africa, noting that in 2023, gross inflows reached approximately US$90 billion. While remittances provide critical household support and macroeconomic stability, the authors warn of a 'remittance trap' and 'Dutch disease' that can hinder long-term economic growth. The paper highlights the use of diaspora bonds in countries like Ethiopia, Kenya, and Nigeria to fund infrastructure, and forecasts that net inflows to Africa will likely increase to US$94 billion by 2043, although their share of GDP is expected to decline.

• In 2023, gross remittance inflows into Africa totaled approximately US$90 billion in current US dollars, with intra-Africa flows accounting for about US$20 billion. North Africa received the largest share of these remittances, and Egypt is the continent's largest destination, primarily due to workers in Gulf countries.
• Remittances are highly significant for certain African nations, with Gambia, Lesotho, Comoros, Liberia, and Somalia each receiving inflows exceeding 15% of their GDP. Conversely, several countries act as net remittance senders, including South Africa, Botswana, Gabon, Equatorial Guinea, Côte d’Ivoire, Libya, Seychelles, and Mauritius.
• Several African governments have utilized diaspora bonds to finance infrastructure and manage debt. Ethiopia floated a bond in 2011 for the Grand Ethiopian Renaissance Dam; Nigeria raised US$300 million in 2017 and planned a further US$500 million bond in July 2024; and Kenya introduced a licensed investment fund in 2020 and viewed diaspora bonds in February 2025 as tools to address a debt crisis where gross government debt rose to 70% of GDP by 2024.
• While remittances support household income and macroeconomic stability, they can lead to a 'remittance trap' or 'Dutch disease.' This occurs when high inflows increase domestic prices and inflation, making exports less competitive and shifting the labour market from high-skill traded sectors to low-skill non-traded sectors, potentially making countries dependent on exporting labour rather than goods.
• Large remittance inflows may reduce government accountability, as families receiving these funds are more insulated from economic shocks and less likely to demand political change, which politicians may use to avoid public scrutiny.
• Net remittances to Africa are forecasted to increase to approximately US$94 billion by 2043. If informal transactions are 75% of formal ones, the total market could reach US$500 billion by 2035. However, remittances as a share of GDP are projected to decline from 2.3% to about 1.5% by 2043.

APA

Yeboua, K., & Cilliers, J. (2026). Remittances to Africa. Institute for Security Studies. https://futures.issafrica.org/thematic/guide.pdf?thematic=10-financial-flows&topic=02-remittances-to-africa

Chicago

Yeboua, Kouassi, and Jakkie Cilliers. Remittances to Africa. Institute for Security Studies, 2026. https://futures.issafrica.org/thematic/guide.pdf?thematic=10-financial-flows&topic=02-remittances-to-africa.

Wikipedia

{{cite report |last1=Yeboua |first1=Kouassi |last2=Cilliers |first2=Jakkie |title=Remittances to Africa |publisher=Institute for Security Studies |date=28 May 2026 |url=https://futures.issafrica.org/thematic/guide.pdf?thematic=10-financial-flows&topic=02-remittances-to-africa |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{yeboua2026remittances, author = {Yeboua, Kouassi and Cilliers, Jakkie}, title = {{Remittances to Africa}}, institution = {Institute for Security Studies}, year = {2026}, month = may, url = {https://futures.issafrica.org/thematic/guide.pdf?thematic=10-financial-flows&topic=02-remittances-to-africa}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }