Remittances In West Africa: Challenges and Opportunities for Economic Development

Remittances represent a critical source of finance for many African economies, particularly in West Africa, where they account for a significant proportion of the sub-region's Gross Domestic Product (GDP) at 7.6 per cent. In 2022, the sub-region received nearly $34 billion in remittances. In relative terms, these flows represent more than double the amount of Official Development Assistance (ODA) and Foreign Direct Investment (FDI) combined.

Despite the obstacles hindering the growth of remittances, the sub-region has witnessed the emergence of several initiatives centred around facilitating the mobilization of the African diaspora and strengthening the developmental impact of remittances through harnessing the potential of mobile money and digital payment systems.

The policy paper examines the role of remittances in the Economic Community of West African States (ECOWAS) sub-region of Africa and the opportunities and challenges associated with engaging the African diaspora. It advocates redefining remittances as domestic resources, highlighting their potential as a catalyst for long-term growth. By identifying the main obstacles hindering remittance flows and examining selected case studies from the sub-region, the paper highlights the emerging innovative approaches and best practices, providing insights for maximizing and leveraging remittances for sustainable development. Finally, it proposes policy levers to optimize remittances' impact on economic development and achieving the Sustainable Development Goals (SDGs).

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