Africa’s Remittance Market to Soar to $500bn by 2035

Africa’s remittance market is a cornerstone of the continent’s economy, with significant contributions to the Gross Domestic Product (GDP) of many African nations. In 2022, remittances to Africa nearly reached the $100 billion mark, with intra-African flows accounting for $20 billion of this amount. This staggering figure underscores the critical role remittances play in the livelihoods of millions across the continent.

Current State of the Remittance Market

Despite their importance, money transfers to Africa are encumbered by high transaction costs, which remain a significant barrier for both senders and recipients. According to a report by the World Bank, the global average cost of remitting money to Africa stands at around 6%, double the United Nations Sustainable Development Goal target of 3% by 2030. In some regions of Sub-Saharan Africa, these costs can skyrocket to as much as 20%.

These high fees are partly due to the lack of adequate financial infrastructure, limited competition among service providers, and stringent regulatory environments, which often hinder the entry of more affordable digital solutions.

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The Role of Mobile Money

Mobile money solutions have emerged as transformative tools in reducing costs. Services like M-Pesa, which began in Kenya and expanded across several African countries, have revolutionised the way money is sent and received. The seamless nature of mobile transactions not only provides convenience but also drives down costs by reducing the need for physical infrastructure.

East-West Africa Remittance Corridor Opens With New Partnership Safaricom acquires full M-Pesa Holding ownership, boosting Africa's mobile money services and financial inclusion through technology. Safaricom launches M-PESA in Ethiopia, offering mobile financial services after securing regulatory approval from National Bank.

Risana Zitha, Managing Director and Head of Africa at DAI Magister, emphasises the potential of mobile money in shaping the future of Africa’s remittance landscape. “Mobile money interoperability across different countries and service providers could significantly decrease the cost and increase the speed of remittances,” Zitha notes. He also stresses the importance of improving financial literacy and streamlining legal frameworks to support this digital transition.

Growth Projections and Future Opportunities

Based on the compound annual growth rate (CAGR) of 12.1% from 2019 to 2022, the formal remittance market in Africa, valued at $100 billion in 2022, is projected to reach $283 billion by 2035. Additionally, the informal market, which constitutes between 35% and 75% of the total value of formal channels, suggests that the overall market could be worth as much as $500 billion by 2035. Sub-Saharan Africa, in particular, sees a higher proportion of informal transactions compared to the global average.

Strategic Imperatives for Stakeholders

To unlock the full potential of the remittance market in Africa, stakeholders across the board need to collaborate strategically. Here are some key areas of focus:

  1. Reducing Remittance Costs: Promoting competition among remittance service providers and improving regulatory frameworks are essential steps towards reducing transaction fees. Investments in financial infrastructure, such as more widespread internet and mobile network access, will facilitate the entry and operation of digital remittance services.
  2. Enhancing Digital Access: While mobile money has laid a robust foundation, there is still considerable room for expansion. Investing in digital infrastructure and ensuring widespread connectivity will allow more Africans to access digital remittance services, potentially transforming the economic landscape of rural and underserved regions.
  3. Promoting Financial Literacy: Education about digital financial services will help build trust and encourage the adoption of mobile money solutions. Understanding how to use these services safely and effectively can empower users and foster a more inclusive financial ecosystem.
  4. Addressing Hard Currency Shortages: The ability to harness remittance flows is particularly crucial at a time when many Sub-Saharan countries are experiencing severe hard currency shortages. Effective management and utilization of remittance inflows can provide a stable source of foreign exchange, contributing to economic stability and growth.


As Africa continues to evolve, the money transfer market holds transformative power that can catalyse sustainable development and economic growth. By addressing the challenges and barriers that currently restrict this sector and leveraging the opportunities presented by technology and innovation, stakeholders can ensure that remittances continue to be a lifeline for millions of Africans. With targeted efforts, Africa’s remittance market is not only expected to grow exponentially but also become a key driver of the continent’s economic future.


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