Remittances to Africa rebounded sharply in 2024, climbing more than 14 percent to US$104.6 billion and erasing a 6 percent decline seen the previous year, according to the African Development Bank’s latest macroeconomic report.
The surge, driven primarily by Egypt and Nigeria with gains of 51.3 percent and 8.9 percent respectively, reinforced the role of remittances as a stable, countercyclical source of external finance for the continent. The report highlighted remittances as Africa’s largest non-debt source of foreign inflows, surpassing even foreign direct investment.
Across the continent, remittances accounted for about 3.5 percent of gross domestic product (GDP), swelling to over 20 percent in countries such as The Gambia, Lesotho, and South Sudan. Analysts caution these figures may understate the full picture, as informal channels of money transfer remain widespread.
“The resilience of remittances is striking. They have helped households maintain spending during shocks and have become a backbone for Africa’s external finance,” the AfDB report said.
The institution also highlighted the untapped potential of diaspora resources. Africa could use instruments like diaspora bonds and remittance-backed securities to channel some of the $30 billion in formal remittances toward structural transformation, the report noted, linking the findings to the 2025 African Economic Outlook.
Despite the gains, high costs continue to erode the impact of these flows. Africa’s average remittance fee stood at 7.9 percent in 2023, nearly double South Asia’s 4.3 percent and more than 2.5 times the UN Sustainable Development Goal target of 3 percent. The report called for improved business climates, fiscal incentives, and policies that encourage more transfers through formal channels to maximise development benefits.
Portfolio investments also rebounded sharply in 2024, reversing years of outflows. Net portfolio inflows jumped from US$1.6 billion in 2023 to US$22.9 billion in 2024, reflecting improved global financial conditions. Central banks in advanced economies cut interest rates in late 2024 as inflation eased, enhancing the attractiveness of African assets. Stronger local currencies further boosted returns on bonds and equity holdings.
The report stressed the importance of deepening local-currency financial markets to reduce exchange-rate risks, broaden investor bases, and lower borrowing costs for development projects.
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Individual country performance underscored the regional rebound. Côte d’Ivoire swung from US$896.1 million in net outflows to $3.9 billion in inflows, supported by booms in cocoa, gold, and oil exports. Egypt also reversed US$4.1 billion in outflows into US$14.3 billion in inflows after unifying its exchange rate in March 2024. Positive momentum was recorded or maintained in 43 of Africa’s 54 countries.
Looking ahead, inflows are expected to moderate but remain positive, with projected portfolio gains of US$10.3 billion in 2025 and US$7.5 billion in 2026. Analysts said the figures indicate a possible pre-pandemic revival if macroeconomic stability, investment climates, and favourable global conditions persist.
“The diaspora’s role in Africa’s economic progress is becoming increasingly tangible,” the AfDB said. “Properly channelled, remittances and portfolio investments could finance development, reduce reliance on external debt, and support structural transformation across the continent.”
The report comes amid renewed focus on leveraging African financial inflows to strengthen resilience against global shocks, including conflict-driven oil price volatility and currency fluctuations. By combining remittance growth with sound policy and investment in local markets, Africa could transform its largest source of non-debt inflows into a catalyst for sustained development.
