Kenya has emerged as the top recipient of diaspora remittances in Eastern Africa for 2024, with inflows reaching $4.8 billion. This far surpasses Somalia’s $1.73 billion and Uganda’s $1.49 billion, according to recently published data.
The World Bank highlights a notable trend of remittances outpacing other external financial flows, including Foreign Direct Investments (FDIs), across low and middle-income countries. In East Africa, South Sudan and Somalia are increasingly reliant on remittances, which contributed 17.5% and 13.6% of their GDPs, respectively, this year.
Region-Wide Trends
Kenya’s remittances-to-GDP ratio has grown steadily, reaching 4.6% in 2024, up from just $51 million in 2001. Rwanda’s ratio has climbed to 3.9%, with inflows increasing from $518 million in 2023 to $537 million in 2024. Uganda maintains a 2.6% ratio, while the Democratic Republic of Congo (DRC) and Tanzania lag behind, with 1.8% and 1% of GDP, respectively.
The DRC has experienced a sharp decline in inflows, dropping from $3.3 billion in 2023 to $1.35 billion this year. Tanzania, constrained by the lack of dual citizenship policies, has seen slower growth in remittances, rising from $8 million in 2000 to $757 million in 2024.
Global and African Insights
Globally, diaspora remittances are projected to reach $685 billion in 2024, with India leading at $129 billion, followed by Mexico, China, and the Philippines. In Africa, Egypt tops the list with $22.65 billion, followed by Nigeria ($19.84 billion) and Morocco ($12.05 billion).
The World Bank urges countries to harness remittance inflows to alleviate poverty, improve financial inclusion, and finance health and education. Migration pressures and demographic shifts are expected to sustain the growth of remittances in the coming years.
Tanzania’s hesitancy to adopt dual citizenship has been a significant factor in its slow remittance growth. A proposed bill to grant special status to Tanzanians abroad remains under discussion, potentially offering property ownership and tax incentives.
As diaspora contributions continue to play a vital role in regional economies, governments are encouraged to create supportive frameworks to maximize their impact on development.