Remittances have risen to the equivalent of over three percent of Kenya’s Gross Domestic Product (GDP), according to a new report from the World Bank.
The 2019 Migration and Development report says remittances have risen from $1.962 billion (Sh196 billion) in 2017 to $2.720 billion (Sh272 billion) last year, an increase of over $750 million (Sh75 billion).
In Uganda remittances were also up from $1.166 billion to $1.245 billion making up 4.5 percent of the country’s GDP. In Tanzania remittances remain much smaller at $430 million, an increase of $25 million on the previous year and now making up 0.8 percent of its GDP.
Across Sub-Saharan, Africa remittances grew almost 10 percent to $46 billion in 2018. In terms of remittances as a share of GDP, Comoros has the largest share, followed by the Gambia, Lesotho and Senegal.
Dilip Ratha, lead author of the new report said remittances were now “on track to become the largest source of external financing in developing countries.”
However, he added that the high costs of money transfers “reduce the benefits of migration.”
The global average cost of sending $200 remained high, at around seven percent in the first quarter of 2019, despite the fact that reducing remittance costs to three percent by 2030 is a global target under the UN’s Sustainable Development Goals.
The cost of remittances was the lowest in South Asia, at five percent, while Sub-Saharan Africa continued to have the highest average cost, at 9.3 percent. Remittance costs across many African corridors and small islands in the Pacific remain above 10 percent.
Source: Business Daily