As we mark the International Day of Family Remittances, we recognize the critical role of remittances in supporting millions of families across Africa.
The numbers are clear: Remittances provide a vital source of income for over 200 million people on the continent.
And remittance flows to Africa reached $100 billion in 2023, nearly 6 per cent of the continent’s Gross Domestic Product, or GDP.
This is more than what Africa receives through Official Development Assistance and Foreign Direct Investment.
For some African countries, remittances account for over 20 per cent of their GDP.
The magnitude of this flow is the evidence that we need to transform our perspectives in Africa and consider remittances NOT as an external source of financing for development beyond our control.
Instead, remittances are a domestic source of financing that can be tapped into and leveraged through effective domestic resource mobilization.
Accepting globalization means accepting its spillovers.
Yes, remittance flows come from overseas from an accounting standpoint.
But from an African policymaking perspective, these remittance flows are domestic resources.
They can and should be managed as such to promote the Sustainable Development Goals.
They are an external flow but not an external finance.
The magnitude of these remittance flows in economic and social terms makes them a critical tool in claiming a “Made in Africa” policy space.
Economically, remittances are a source of $100 billion in funding.
From a social perspective, with over 200 million African family members relying on remittances, for many, they are the difference between survival and destitution, between going to bed on an empty stomach and having a meal.
As a critical piece in claiming a "Made in Africa" policy space, remittances become a key lever in tackling the triple paradox of financing, energy and food systems that are hampering Africa’s development.
To tackle the triple paradox, shifting the paradigm of Africa's finance for development from ODA to Domestic Resource Mobilization is the game changer, and the $100 billion from remittances can make a major contribution.
Finally, in a year when the African Union's theme is “Educate and Skill Africa for the 21st Century,” remittances can be leveraged to transform education in Africa.
They can be invested in harnessing the digital revolution to expand access to high-quality materials and infrastructure, including for women and girls.
For that, remittances need to become a cost-effective flow to compete in African capital markets, which they are not today.
So, let us also mark this Day with a stronger call to leverage the full potential of remittances by reducing transfer costs.
Indeed, while progress is being made, the cost of remittance transfers to Africa remains one of the highest globally, at around 8 per cent per $200 sent.
Our SDG target is to get this figure under 3 per cent.
Together, we can achieve this goal.
We must mobilize a fundamental, Africa-centred policy shift tailored to our continent's realities.
Let us foster Africa-driven innovation, encourage entrepreneurship and develop remittance ecosystems supported by effective fintech solutions to reduce transfer costs.
This is how we can – together – deliver the promise of "Digital remittances for cost reduction and financial inclusion."