“According to the latest data we have, remittance inflows contribute approximately 31.5% of Gross Domestic Product (GDP) underscoring its critical importance to the economy of the Gambia,” he said at the Eighth Stake in the Nation Forum (SNF8) Organised by GK Partners & the Office of the President held at the Sir Dawda Kairaba Jawara Conference Centre, Bijilo.
“In 2024 alone, and I underline which is the main theme of this topic, The Gambia received over US$775.6 million in remittances, reflecting a significant increase of US$28.8 million over the prior year. The expansion is partly due to improved monitoring methodologies, the increased use of formal channels by the Diaspora and the use of technology in sending remittances,” he explained.
He further stated that the emergence of fintech companies in the industry is believed to have also lowered the cost of sending and receiving remittances into the economy, thus bolstering the amount of remittances received during the reviewed period.
“A recent survey by our Economic Research Department of the Central Bank of Africa revealed that the primary sources of these remittances include the United States of America, Europe, and other African countries where our Diaspora is well established. In terms of utilisation, the funds are used predominantly for consumption, education, healthcare, and small-scale investment financing, thereby fostering development of both the household and community levels.”
Mr Njie also disclosed that a survey confirmed that 36.9% of total remittances received were spent on household consumption, while 51.8% were spent on private construction. “These two go to support domestic demand and remain a critical driver of economic growth in the Gambia from 2021 to 2024. Furthermore, the survey indicated that 7.5% of the remittance inflows were personal savings, providing the domestic financial system with the much-needed liquidity for investment and capital accommodation.”
“Health expense, education, and other family expenditures account for the remaining 3.8% of total remittance received during the period,” he revealed.
“While the benefits of remittances are clear, there is room for improvement to maximise their impact. First, we need to create an enabling environment that encourages our Diaspora to invest in large and more sustainable projects,” he added.
“This includes improving the ease of doing business in the country, offering attractive investment incentives, and ensuring political and economic stability.”
“Second, we should explore partnerships with financial institutions to lower the cost of remittance transfers. The global target, as highlighted in the Sustainable Development Goals, SDG 10, is to reduce the cost of sending $200 to 3% by 2030 from a cost of 7% in 2019.”
“High transaction fees can limit the amount of money received by families, thus reducing its overall impact on the economy. By leveraging technology and fostering competition among service providers, we can make remittance transfers more affordable and efficient. Third, we must strengthen our data collection mechanisms to better understand remittance inflows and their usage.”
According to Njie, the Central Bank of the Gambia has also been developing strategies to strengthen the non-bank remittance sector with a view to increasing remittances sent through the formal channel. “For example, the Central Bank recently concluded the review of Fintech and Forex Bureau guidelines. This reform will guide the licensing and operations for remittance operators as well as facilitate the implementation of anti-money laundering measures.”
“By developing the non-bank remittance sector and increasing healthy market competition, the cost of remittance sending is expected to significantly decline towards the global target of 3% of the amount remitted by 2030,” he said, adding the importance of remittances to the Gambian economy cannot be overemphasized.
“While we have made significant progress in enhancing the inflow and utilization of remittances, there remain substantial opportunities to further leverage these funds for personal and national development.”
