Rwanda has witnessed a significant surge in remittances from its diaspora over the past decade, with the amount soaring to $470 million in 2023 from $65.1 million in 2010.
This increase, according to official data, highlights the growing financial contributions of Rwandans living abroad.
Remittances, comprising financial or in-kind transfers by migrants, have surpassed foreign direct investment (FDI) in Rwanda for over three years.
Jeanine Munyeshuli, the Minister of State in charge of Public Investment and Resource Mobilisation, emphasized the scale of this contribution during the 19th National Dialogue Council Umushyikirano last week, responding to queries from Moses Mugisha Gashirabake, a Rwandan investor based in Canada, regarding the optimization of diaspora investments.
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Mugisha acknowledged the rising trend in remittances and expressed interest in diversifying diaspora contributions beyond monetary transfers to tangible investments in Rwanda.
To facilitate this shift, Munyeshuli proposed the development of reliable investment platforms, potentially under the Capital Market Authority (CMA). She also encouraged diaspora members to invest in local companies and real estate, citing opportunities like purchasing properties developed by the Rwanda Social Security Board (RSSB) or the private sector.
Examining the trend of diaspora remittances
The National Bank of Rwanda&039;s (BNR) annual reports reveal a consistent increase in diaspora remittances over the years, with figures rising steadily from $65.1 million in 2010 to $444 million in 2022/2023. The slight dip to $208.2 million in 2019/2020 was attributed to the Covid-19 pandemic's impact on global employment and economies.
The World Bank's December 2023 "Migration and Development Brief 39," titled "Leveraging Diaspora Finances for Private Capital Mobilization,” notes a 1.9% increase in remittances to Sub-Saharan Africa in 2023, reaching $54 billion. Rwanda, Mozambique, and Ethiopia were among the top beneficiaries, with Rwanda experiencing a 16.8% growth in remittance inflows.
This increase aligns with the recovery of job markets in OECD countries post-Covid-19, where immigrant employment rebounded more rapidly than native employment, fueling the rise in remittances.
Impact of Remittances on Rwanda's Economy
Remittances contribute to Rwanda's economy in multifaceted ways, including family support, education funding, and real estate development.
A study presented at the Fourth Economic Policy Research Network (EPRN) Rwanda Annual Research Conference in 2018 by researcher Edward Kadozi found that households receiving international remittances were 69.9% more likely to engage in business activities compared to those not receiving remittances.
Additionally, these households saved 107.2% more and showed positive impacts on education and health outcomes.