African remittance has always been Africans living in Europe or America sending money back home to their families. Times have changed. Africans have realized that it’s all within the continent. Apart from political instability and economic factors that are known to make them move, there’s education. African universities are admitting more and more African foreign students, especially after the COVID-19 pandemic. The international borders were closed, and they had no choice.
The African Continental Free Trade Area (ACFTA) is fuelling the intra-movements. The international money transfer company WorldRemit suggests that between 2015 and 2019, the population has grown from 16 million to 17 million. African leaders saw a need to put in place a free movement policy to promote investments in the region.
South Africa tops the list as a destination country in Africa. It is a home for many African nationals because of its economic stature. In 2019, there were about 4 million migrant workers in the country (7.2% of the entire population).
The Burkina Faso-Cote d’Ivoire corridor is the second largest migration corridor for labor migrants in sub-Saharan Africa. Burkina Faso is one of the poorest countries in Africa, so they move in search of a job to help their families back at home. Ivory Coast’s economy has seen tremendous growth since 2012. It has expanded at an average rate of 8%, attracting foreigners who go to work in the cocoa and coffee plantations.
The migration corridor between South Sudan and Uganda is ranked third among the 20 major African migration corridors. In 2018, there was a large group of Sudanese who crossed the borders to seek refuge.
Other migration corridors include Mozambique-South Africa (in search of greener pastures), Sudan-South Sudan, Somalia-Kenya (to seek refuge from wars in their country), Somalia-Ethiopia, and Lesotho-South Africa.
African remittances contribute to 20% of the global economy. According to the World Bank, migrants within Africa send remittances of about $14 billion each year. South Africa, Côte d’Ivoire, and Uganda are the highest remittance senders on the continent.
According to figures available for 2021, the remittance flow is as follows;
- Nigeria $19·2 billion
- Ghana $4·5 billion
- Kenya $3·7 billion
- Senegal $2·7 billion
- Zimbabwe $2·0 billion
- The Democratic Republic of Congo $1·3 billion
- Uganda $1·1 billion
- Mali $1·1 billion
- South Africa 900 million
- Togo 700 million
The mode of remittance sent between the countries is through commercial banks and money transfer organizations. The fee charged for a transaction is expensive. Africa has the highest transaction costs globally.
Furthermore, mobile wallets have linked up with Western Union to enable people to send money to banks in any country.
But it is high time mobile wallets went fully digital. I’m coming up with an idea where there’s end-to-end encryption between the mobile wallets in Africa. People can access mobile phones easily, even in the remotest parts, as opposed to banks.
An M-Pesa member from Kenya can send money to his family back in Nigeria who use MTN. Mobile wallets will be faster, cheaper, and more efficient. It will be a game changer in African remittances just by how big mobile wallets are in Africa.
I wrote an article about mobile wallets in Kenya, and it’s a big thing there. End-to-end encryption between African mobile wallets will be a game changer.
Main Photo By AMISOM Public Information - Flickr, CC0, https://commons.wikimedia.org/w/index.php?curid=41459056
