Inbound remittances to Rwanda increased by 17 percent from $155.4 million in fiscal year 2015/2016 to $181.9 million in fiscal year 2016/2017, according to figures from Central Bank.
Inbound remittance is the money sent to loved ones in the country by relatives and friends from overseas.
During the same period, outward remittances or money sent outside the country, slightly dipped – from $57.61 million in fiscal year 2015/2016 to $57.44 million in fiscal year 2016/2017.
A remittance is a transfer of money by a foreign worker to an individual in his or her home country and the inbound remittance growth is partly explained, as reported, by lowering of transaction costs by money transfer operators.
“This growth is supported by the good performance in the global economy and the emergence of mobile network operators (MNOs) in addition to money transfer operators (MTOs) which has lowered transaction costs making it cheaper to send money across the borders,” reads a statement from the Central Bank.
"The reported significant increase in remittances is a welcome, particularly in the context where Rwanda, and other countries in Africa, are attempting to diversify the sources of development finance,” said Yohannes Hailu, Economic Affairs officer at the UN Economic Commission for Africa (ECA), in Kigali.
A mobile network operator or MNO, also known as a wireless service provider, wireless carrier, cellular company, or mobile network carrier, is a provider of wireless communications services that owns or controls all elements necessary to sell and deliver services to an end user.
Things have not looked good in the past few years since inbound remittances decreased from $169.65 million in fiscal year 2013/2014 to $167.02 million in fiscal year 2014/2015 and then to $155.40 million in fiscal year 2015/2016. Amounts sent out had increased from $49.46 million to $53.44 million and then to $57.61 million, respectively, in the same time period.
In June last year, a report by the International Fund for Agricultural Development (IFAD), a specialised agency of the UN dedicated to eradicating poverty and hunger in rural areas of developing countries, indicated that inbound remittances contributed at least 2 per cent to Gross Domestic Product in 2016 and grew by 34 per cent over the last decade.
Global economic growth reportedly slowed in 2015 and 2016 to stand at 3.1 per cent in 2016 with advanced economies growing moderately compared to Africa.