Remittances: Africa’s untapped power source

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If it’s about Africa, it’s our business – and in this episode of The Business of Africa, we dive into one of the continent’s most underestimated economic engines: remittances.

While financial outflows often dominate global headlines, it’s the inflows – particularly money sent home by Africans abroad – that are quietly transforming lives and stabilising economies.

Guest expert Gondai Ronald Bangidza, a seasoned development practitioner, breaks down the strategic importance of remittances and why they deserve more attention.

According to the African Development Bank, remittances are now the largest non-debt financial inflow to the continent – outpacing even foreign aid and direct investment.

In 2022 alone, they totalled a staggering $97.4 billion, contributing over 3% to Africa’s GDP.

But remittances are more than numbers. They’re lifelines – covering school fees, food, farming inputs, and even funding small businesses.

Bangidza highlights how these funds reduce poverty, enhance financial inclusion, and provide much-needed stability in fragile economies like Zimbabwe, where remittances contributed over $2.2 billion in 2024 alone.

Still, there are challenges. High transfer costs, lack of trust in formal systems, and the risks of informal channels – like handing cash to a truck driver – create barriers.

Africa remains the most expensive region in the world to send money to. So what’s the fix?

Bangidza points to mobile money as a game-changer – offering instant, traceable, and affordable solutions, even in rural areas.

He also champions diaspora bonds, like Nigeria’s successful 2017 initiative, as a smart way to transform remittances from survival tools into development funding.

As Africa pushes toward the UN’s goal of reducing remittance costs to under 3% by 2030, the big question is: How can we turn these billions into long-term growth?

Catch the full episode to hear Bangidza’s policy recommendations, real-world examples, and how African governments can better harness this pot of gold.

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