A new report by the Institute for Security Studies (ISS) has revealed that Egypt and Nigeria lead Africa’s remittance inflows, accounting for the bulk of the $95 billion sent to the continent in 2024.

The study shows that remittances — money sent home by Africans abroad — have become one of the largest and most stable sources of external finance, often surpassing foreign direct investment (FDI) and foreign aid. In just over a decade, inflows rose from $53 billion in 2010 to $95 billion in 2024, boosting their share of Africa’s GDP from 3.6% to 5.1%.

According to the ISS report, remittances provide direct household support for food, healthcare, education, and housing, while also stimulating local trade and services. Unlike foreign aid, which often passes through bureaucratic channels, remittances go straight into families’ hands, making their impact immediate and tangible.

While Egypt, Nigeria, and Morocco dominate the inflow figures, some African countries like Angola, Seychelles, and São Tomé and Príncipe receive less than 1% of the total, highlighting major disparities across the continent.

The report also noted that a large portion of remittances still flows through informal channels, such as hand-carried cash and unregistered transfer systems, especially in Nigeria, Zimbabwe, DR Congo, Somalia, and Libya. This reduces transparency, weakens data for policy-making, and limits the full benefits of diaspora contributions.

The ISS highlighted three key steps to unlock the full potential of remittances:

Lower transfer costs and formalize flows – Africa’s average transfer fee is 5%, far above the UN’s 3% target.

Link remittances to financial systems – encouraging savings, insurance, and productive investments.

Incentivize diaspora investment – through tools like diaspora bonds and structured savings plans.

Technological solutions like mobile money platforms (M-Pesa, MTN MoMo, Airtel Money) and cross-border systems such as the Pan-African Payment and Settlement System (PAPSS) are already reducing costs and improving efficiency.

Looking ahead, analysts project that with the right policies, Africa’s remittance inflows could grow to $168 billion by 2043, becoming a strategic pillar of the continent’s financial future.

As the report concludes: “Remittances are more than just money transfers — they are a lifeline for millions of families and a powerful driver of Africa’s development.”