East Africa: Diaspora Remittances Outpace FDI, but Costs Remain a Major Hurdle
East African countries received $17.38 billion from their citizens living abroad between 2013 and 2018, as foreign remittances outpaced foreign direct investment to become the largest source of external financing in low and middle-income countries.
According to the latest World Bank brief, during the period, Kenya topped the region as the biggest beneficiary of remittances, receiving $10.74 billion, followed by Uganda ($6.28 billion), South Sudan ($2.85 billion), Tanzania ($2.39 billion), Rwanda ($1.13 billion) and Burundi ($257 million).
The Bank's latest Migration and Development Brief shows that the volume of remittances into the five East African countries increased by more than 60 per cent to $4.66 billion in 2018, from $2.84 billion in 2013.
An analysis of the World Bank data for 2018 by the Washington-based Pew Research Centre shows that most of the inflows into Tanzania were from the United States, Kenya, Uganda, Burundi, South Africa, Malawi and Australia.
On the other hand, foreigners living and working in Tanzania remitted some $629 million to their countries last year, with most of the outflows going to India, Kenya, China, Uganda, US, Germany, Burundi, Italy, Britain, Rwanda and Pakistan.
According to the EAC trade report (2017) East Africa's FDI inflows declined by 25.3 per cent to $6.6 billion in 2017 from $8.8 billion in 2016. Kenya recorded the highest decline in FDI inflows--a drop by 60.6 per cent to $717.7 million, down from $1.8 billion.
It was followed by Uganda, whose FDI fell by 14.2 per cent to $1.3 billion from $1.5 billion while Tanzania recorded a seven (7) per cent drop in FDI to $3.3 billion from $4.8 billion in the same period. However, FDI inflows to Burundi increased to $146 million from $65.1 million, while in Rwanda FDI grew to $1.2 billion from $600.1 million in the same period. Read more from All Africa.
Source: All Africa