Improving the management of remittances and their use for development impact in Africa
Remittances sent by migrant workers to and within Africa were over US$60 billion in 2016, of which 38 per cent (US$23 billion) were sent by migrants residing in Europe. These flows are expected to reach US$80 billion in 2020, benefiting over 200 million family members of African migrant workers, the majority of whom live in rural areas (55 per cent of the population).
In Africa, one out of five people send or receive international remittances, without considering domestic flows. Most remittances received in Africa cover daily needs, with a significant amount (25 per cent) available for savings or investment.
Bringing these funds into the formal financial system can dramatically increase their impact. When remittances are deposited into financial institutions, they can benefit both the individual and the community.
With better financial education and a broader range of financial services to choose from, remittance recipients are empowered to make financial choices that can advance them towards financial resilience. The ability to expand financial services, however, depends on institutional capacity, willingness to offer services to low-income people, and on regulatory frameworks that enables them to do so.
What IFAD is doing?
PRIME Africa aims to address these development opportunities through innovations, partnerships and scalable products that promote cheap and fast remittance transfers. By helping maximize the impact of remittances for millions of families, PRIME Africa will contribute to foster local economic opportunities in the migrant workers’ countries of origin.