Business Hacks
The Role of Remittances in Boosting Africa’s Development.
Unknown to many, there is a strong correlation between remittances and the achievement of the global Sustainable Development Goals (SDGs), which are aimed at making our world a better place to live in.
Sustainable Development Goals indicate a focus on the eradication of poverty and hunger, ensuring healthy lives, promoting the wellbeing of all, supporting inclusive and equitable quality education among several others.
Interestingly, remittances also contribute to solving the above highlighted challenges. Underscoring this point, the World Bank states that approximately $100 billion was redirected to Africa in 2022 by 40 million migrants working in the diaspora.
By way of definition, international remittances are funds channelled back to countries of origin by individuals who work in the diaspora. These monies help to facilitate the provision of necessities including educational and lifesaving medical interventions that are aimed at improving the quality of life for the indigent and providing timely relief when required.
The preliminary edition of the RemitScope report by the International Fund for Agricultural Development (IFAD) reveals that 31% of African countries are dependent on remittances for 4% of their GDP. Funds sent into Africa from the diaspora have supported critical efforts like boosting gender equality through the provision of more equitable access to education. Now, children of school age stand a better chance of being given the necessary support to enroll in formal institutions of learning regardless of their gender.
Remittances also make it possible for beneficiaries to access decent health care services where the right diagnosis, medication and attention are administered as needed. Overall, remittances have a positive ripple effect that draws communities in Africa closer to achieving the Sustainable Development Goals.
Through strategic partnerships with International Money Transfer Organizations (IMTOs), some indigenous companies focus on enabling last-mile termination into bank accounts and mobile money wallets. This ultimately improves access to cash through mobile money agents and ATM networks hence accelerating the ability to save.
In Uganda, one of such company, Interswitch, processes approximately three hundred thousand (300,000) remittance transactions monthly amounting to approximately 50 billion shillings and equivalent of $13,157,894 million.
As an Africa-focused payments business, Interswitch remains focused on its mission to provide technology solutions that connect and empower entities, individuals, and communities, contributing to the advancement of development in Africa by providing effective technology solutions and infrastructure at affordable costs.
Accessing financial services does not have to be expensive. It is against this backdrop that Interswitch has leveraged shared infrastructure to make the cost of transacting across payment platforms affordable for the average business, and consequently the individual.
In Uganda, the commitment that Interswitch has made towards facilitating remittance payments across continents is unwavering. It is evidence that payment processing positively impacts lives. Interswitch is regulated by the Bank of Uganda and as a group-wide mandate, the business strives to adhere to global regulatory and operational standards to ensure the safety, transparency, and continuity of remittance transactions.
To learn more about the remittance solutions that Interswitch provides to enterprises, write to [email protected]
Patricia Taremwa
Marketing and Communication Executive
January 2024
