The African diaspora has a critical role towards the development of the continent. The diaspora must position itself robustly to devise innovative ways of utilising its resources toward improving livelihoods of households and national economies in the countries of origin and destination. From 2015 to 2019, African migrants increased surpassing global migrant percentage increases. Between 2015 and 2019, migrant numbers in Africa increased from 23.5 million in 2015 to 26.5 million in 2019 representing a 13 percent increase. Migrants in Africa accounted for 9.8 percent of the global number of migrants in 2019. These trends are partially due to regional integration through Regional Economic Communities (RECs).
Remittances to African countries in 2018 were about 84.3 billion US dollars constituting 12.1 percent of global remittances. Remittances to African countries had risen to about 85.9 billion US dollars in 2019 which was 12.0 percent of global remittances. Although the COVID-19 pandemic was expected to lead to a decrease in remittances to Africa in 2020 by October 2020, remittances to Africa had reached 78.4 billion US dollars constituting 11.7 percent of global remittances. Remittances act as a form of insurance against macroeconomic shock for receiving countries and improve sovereign credit worthiness by increasing the level and stability of foreign exchange receipts. However, the major challenge is how to translate these into developmental dividends.
Remittances have both direct and indirect effects on the welfare of the population in the migrant sending countries. Evidence from some studies show that remittances reduce the depth and severity of poverty. Remittances have been found to have an income stabilizing effect at the household level. Remittances have been noted to cushion households in times of economic downturns, financial crises, and natural disasters because migrants living abroad send more money to help their families back home. Migration contributes to human capital formation as remittances are spent on education and health. However, there is also contradictory evidence that migration has shown to raise inequality among households, as only the relatively well-off have the resources to send workers abroad and therefore receive remittances. Recently, there have been observations that households need technical advice on how to use the remittances of migrants in their countries of origin. Also, there is a need to assess the sustainability of remittances in the context of changing circumstances of migrants in host countries.
Founder & CEO, African Diaspora Network (Moderator)
Director, a.i., Gender, Poverty and Social Policy Division
United Nations Economic Commission for Africa (ECA)
Addis Ababa, Ethiopia
Director, GK Partners and FLIA Visiting Professor in Practice, London School of Economics
SDG Finance and SSC Regional Advisor, Africa Finance Sector Hub
Expert in Gender, Poverty and Social Policy