KEY POINTS
- Kenya received $4.8 billion in diaspora remittances, surpassing Somalia and Uganda, contributing 4.6% to its GDP in 2024.
- Sub-Saharan Africa saw a 2.4% increase in remittances, with inflows surpassing Foreign Direct Investments as a key financial source.
- Tanzania’s limited growth in remittances is linked to the absence of dual citizenship policies, despite plans to enhance diaspora engagement.
Kenya has become the top recipient of diaspora remittances in Eastern Africa, achieving $4.8 billion in 2024, based on recently published World Bank figures.
The inflows greatly surpassed those of Somalia and Uganda, which obtained $1.73 billion and $1.49 billion, respectively.
Kenya remittances boost economic growth
The report emphasizes Kenya’s strong increase in remittances, which currently account for 4.6 percent of its gross domestic product (GDP).
This accomplishment highlights the nation’s dependence on its diaspora to enhance economic growth and development.
Remittances surpass foreign investments
According to the World Bank, remittances have surpassed Foreign Direct Investments (FDIs) and Official Development Assistance (ODA) as the main source of financial inflow for low and middle-income nations.
Remittances to these countries are anticipated to hit $685 billion in 2024, while sub-Saharan Africa has seen a 2.4 percent growth over the last year.
“During the past decade, remittances increased by 57 percent, while FDI declined by 41 percent,” the report stated, adding that migration pressures and economic disparities are likely to drive continued growth in these inflows.
Among African countries, Egypt topped the list with $22.65 billion, followed by Nigeria with $19.84 billion and Morocco with $12.05 billion.
Worldwide, India continued to be the leading recipient, drawing in $129 billion in remittances in 2024.
Diverging trends in East Africa
Although Kenya remains the leader in the region, other East African nations exhibited varying results.
Uganda’s remittance inflows increased to $1.49 billion, accounting for 2.6 percent of its GDP, whereas Rwanda experienced a minor rise to $537 million, which is 3.9 percent of GDP.
Tanzania, on the other hand, fell short, obtaining $757 million, only 1 percent of its GDP. Burundi and the Democratic Republic of Congo faced challenges, with inflows averaging 1.6 percent and 1.8 percent of GDP, respectively.
The DRC experienced a notable drop from its 2023 amount of $3.3 billion to $1.35 billion in 2024.
Tanzania’s policy issues
Tanzania’s sluggish increase in remittances has been linked to the absence of dual citizenship legislation.
Although the government revealed in May its plans to provide diaspora residents with a “special status” that would enable property ownership and offer investment incentives, the initiative has not yet been implemented.
The World Bank advised countries to utilize remittance inflows to tackle poverty, fund education, and enhance access to capital markets.
With migration on the increase, these inflows are anticipated to significantly contribute to economic stability and development throughout the region.
