An investment bank predicted Africa’s remittance market to soar to $500 billon in 2025.
The total value of remittances across the continent reached nearly $100 billion in 2022 − $20 billion of which was intra-African flows. Remittances has a significant portion of African Gross Domestic Product (GDP),
Managing Director and Head of Africa at DAI Magister, Risana Zitha, said increased competition, stakeholder collaboration and investment in financial infrastructure will contribute to lower remittance fees.
Despite the importance of remittances to the African economy, the cost of sending money to the continent remains very high.
“The remittance fees should be less than 3% by 2030, but data from the World Bank suggests that at present the global average is twice this target, with the figure as high as 20% in some parts of Sub-Saharan Africa.”
Zitha said mobile money has emerged as a game-changer in tackling the challenge of high remittance costs in Africa. Increased mobile money interoperability, better financial literacy and streamlined legal frameworks to further drive down fees across the region.
Zitha said: “Looking ahead, the growth of remittances in Africa is expected to continue. Based on the CAGR of 12.1% between 2019 and 2022, the formal African remittance market, valued at $100 billion in 2022, could potentially reach $283 billion by 2035.
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