Significant Growth in Gambia’s Remittance Inflows Highlights…

In 2024, the Gambia received over US$775.6 million in remittances, contributing approximately 31.5% to GDP. This marked an increase due to enhanced monitoring and the use of formal channels. The remittances primarily support household consumption and construction, with significant plans to enhance the impact through cost reduction and improved investment conditions proposed by the Central Bank.

The Gambia’s economy received a significant boost in 2024 through remittance inflows that exceeded US$775.6 million, marking an increase of US$28.8 million from the previous year, contributing roughly 31.5% towards Gross Domestic Product (GDP). These remittances are notably sent through formal channels, influenced by improved monitoring and technological advancements in the money transfer industry. Chiefs from financial entities have remarked on the contribution of fintech companies in reducing transfer costs related to remittances, which has a positive effect on the national economy.

A recent survey by the Economic Research Department of the Central Bank of Africa identified the main origins of remittance flows to the Gambia as the United States, Europe, and other parts of Africa. The survey suggested that a considerable share of these remittances is allocated to fundamental needs such as consumption, education, and healthcare, thereby supporting local development. It was noted that 36.9% of the remittances received are utilized for household consumption, with another 51.8% directed towards private construction projects, thus driving economic growth within the country.

Mr. Njie from the Central Bank emphasized the importance of maximizing the impact of remittances through various strategies. According to him, creating a conducive environment for large-scale investments from the Diaspora, improving the ease of doing business, and promoting political stability are essential. Additionally, partnerships with financial institutions to lower transfer costs are crucial, as reducing transaction fees would allow for more funds to remain within families in the Gambia.

Mr. Njie highlighted the global initiative to reduce the cost of remittances as per Sustainable Development Goals. He also specified that the Central Bank is actively working to strengthen the non-bank remittance sector to ensure that more inflows are received through formal channels. Their recent review of the Fintech and Forex Bureau guidelines aims to guide remittance operators and establish measures against money laundering, which is pivotal for improving the economic situation in the Gambia.

While the improvement in remittance inflows is commendable, Mr. Njie concluded that much work remains to be done to further harness these flows for personal and national development. Strengthening data collection regarding remittance usage and enhancing the competitive landscape for remittance transfer services are essential next steps in achieving greater economic benefits.

In the Gambia, remittances play a fundamental role in the national economy, contributing significantly to the overall GDP. With a considerable portion of the population residing abroad, primarily in the United States and Europe, remittances provide vital financial support for households. The emphasis on remittance flows highlights the importance of developing financial technologies to ensure efficient and cost-effective transfers, fostering local economic growth and social development.

In conclusion, remittances received in the Gambia in 2024 have shown remarkable growth, emphasizing their critical role in the nation’s economy. There is an ongoing need to improve investment conditions and reduce transfer costs, encouraging the non-bank sector’s competitiveness. By leveraging the potential of these funds, the Gambia can bolster household welfare and overall economic development, creating a sustainable future for the nation.

Original Source: thepoint.gm