Kenya continues to lead in diaspora inflows across the eastern Africa region, receiving $4.8 billion in 2024. The figures tower over Somalia’s $1.73 billion and Uganda’s $1.49 billion, according to newly-published World Bank statistics.
The Democratic Republic of Congo and South Sudan recorded declines in inflows on a year-on-year basis, to $1.35 billion and $1.14 billion respectively, while the remaining three EAC States Tanzania, Rwanda and Burundi are still stuck below the $1 billion ceiling.
The latest figures were published along with World Bank estimates that diaspora remittances have significantly overtaken other types of external financial flows to low and middle-income countries across the world, including Foreign Direct Investments (FDIs), within the past decade.
In EAC, South Sudan and Somalia have become increasingly dependent on remittances to prop up their economies, contributing 17.5 percent and 13.6 percent of GDP respectively this year.
Kenya’s remittances-to-GDP ratio currently stand at 4.6 percent after inflows climbed steadily from $51 million in 2001. Rwanda’s ratio is now up to 3.9 percent following a further improvement in inflows from $518 million in 2023 to $537 billion in 2024. Uganda’s ratio is 2.6 percent.
Remittance inputs to economies of the remaining three EAC member States are stunted at below two percent. For DR Congo it has dropped to 1.8 percent of GDP in tandem with a sharp decline in inflows from record levels of $3.26 billion in 2022 and $3.3 billion in 2023.
Burundi’s figure is 1.6 percent of GDP on average inflows of just below $50 million since 2018 while Tanzania continues to trail far behind its EAC counterparts with diaspora remittances of $757 million contributing just one percent of its GDP in 2024.
In a blog published on December 18 to mark the annual International Migrants Day, World Bank economists Dilip Ratha, Sonia Plaza and Eung Ju Kim said the whole of sub-Saharan Africa had recorded an estimated 2.4 percent growth in remittance flows in the past year.
Officially recorded remittances to low and middle-income countries across the globe were expected to reach $685 billion in 2024, larger than FDIs and Official Development Assistance (ODA) combined and excluding flows through informal channels.
“During the past decade, remittances increased by 57 percent while FDI declined by 41 percent. Remittances will likely continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change.”
The top five recipient countries for remittances in 2024 were India with an estimated inflow of $129 billion, Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion) and Pakistan ($33 billion).
“Therefore, countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and non-state enterprises,” the blog authors said.
In Africa, Egypt topped the list with $22.65 billion in 2024, followed by Nigeria ($19.84 billion) and Morocco ($12.05 billion).
The World Bank report covers remittance inflows to low and middle-income countries since 2000 with Uganda maintaining the healthiest stream of inflows among EAC countries throughout the period under review, starting off with $238 million in 2000.
Tanzania’s slowness in encouraging more diaspora remittances to bolster its economy, in the face of a snail’s pace growth in figures from $8 million in 2000 to $757 million in 2024, has been attributed primarily to a reluctance to introduce laws allowing its diaspora to adopt dual citizenship.
In May this year the government said it was planning to table a bill granting Tanzanian nationals who have taken up permanent residence abroad with a “special status” in lieu of dual citizenship, giving them specific rights and privileges in terms of property ownership and investment tax favours. The bill, however, remains on the drawing board.
