Key Findings

Global remittance trends

• Total remittances transferred in 2021 to LMICs are estimated at US$605 billion.

• By 2030, an estimated US$5.4 trillion in remittances will be sent to LMICs.

• Most of these resources will be used by remittance-receiving families to reach their own individual goals: increase income, access better health and nutrition, have educational opportunities, improve housing and sanitation, entrepreneurship, and to help people out of poverty.

• During the COVID-19 pandemic, digital channels, including mobile remittances have helped to maintain regular remittance flows. This means that families have kept above the poverty line and have avoided falling back into “poverty traps”. The crisis highlighted the development impact of mobile remittances.

• International remittances sent and received via mobile channels grew by 48 per cent in 2021, reaching US$16 billion. Still, mobile remittances represent less than three per cent of all global flows.

• While the average global remittance transfer cost is 6 per cent (Q4 2021), the digital remittances index registered at 4.64 per cent.

• Mobile transfer costs are in line with the SDG target 10.c of 3 per cent by 2030.

• Reducing remittance costs by 1 per cent implies US$6 billion in additional resources in the hands of remittance families.

• Remittances terminated into mobile wallets and distributed through mobile money agents offer opportunities to improve access in rural areas beyond the brick-and-mortar cash access points.

• Although women now comprise about half of all remittance senders (100 million), the are often digitally excluded in LMICs, and particularly in rural areas.

African remittance trends

• Remittances are a crucial financial inflow for African households, with around US$94 billion received in 2021 from African migrants around the world.

• Remittances to Africa grew by 13 per cent between 2020 and 2021 showcasing an unexpected resilience in spite of economic turmoil.

• Although remittance transfer costs have fallen over the last years, the African remittance market remains the most expensive, with an average cost (to and within Africa) of 7.83 per cent of the send amount (Q4 2021) against the global average of 6.0 per cent (Q4 2021). • Reduction to 3 per cent would lead to an additional US$4 billion per year being received by migrant families in Africa.

• In Africa more than in any other region, mobile money has triggered financial inclusion, especially in Eastern and Western Africa.

• At the customer level, adoption of mobile money alternatives results in reduced average fees and transaction costs due to saving time and travel to send and receive remittances; increased convenience and safety to both remittance senders and recipients; and expanded reach among vulnerable populations, including rural dwellers and women.