Nigeria, Egypt, and Morocco emerged as the leading recipients of the $95 billion in remittances that flowed into Africa in 2024, according to the newly released State of Africa’s Infrastructure Report 2025 by the Africa Finance Corporation (AFC).
The inflow of remittances nearly matched the total Foreign Direct Investment (FDI) received by the continent in the same year, highlighting the increasingly vital role of diaspora contributions to African economies.
The AFC report underscores the stability and resilience of remittances as a source of external finance for Africa. It notes that, with the exception of 2024, remittances have consistently outpaced FDI, portfolio flows, and official development assistance in recent years, making them one of the most dependable financial inflows. This consistent performance positions remittances as a crucial pillar for economic stability and growth across the continent.
Nigeria, with its vast and economically active diaspora, maintained its position as a key remittance hub. The report suggests that the surge in remittances to Nigeria and other top-receiving nations signals a positive shift towards more transparent and formalized financial relationships between African countries and their global diaspora, moving away from historical patterns of capital flight.
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While primarily directed towards household consumption and social obligations, the AFC emphasizes the potential of these remittances for more structured investments, particularly through instruments like diaspora bonds. Several African countries, including Ethiopia, Kenya, Egypt, and Nigeria, have already experimented with such bonds, albeit with mixed results.
To fully unlock the investment potential of remittance-linked capital, the AFC recommends building investor trust through good governance, reliable repayment mechanisms, and robust legal protections.
Additionally, mitigating macroeconomic risks such as exchange rate volatility and inflation, and offering globally competitive returns or indexing diaspora instruments to inflation, are crucial steps to attract and retain these vital funds for long-term development.
