Remittances: an important source of external finance in North Africa

Abstract

This policy brief examines the critical role of remittances as a source of external finance in North Africa, highlighting their significance in supporting sustainable development and economic stability. With nearly 25.6 million North Africans living abroad by the end of 2023, remittances have emerged as the most substantial and resilient form of foreign income, surpassing official development assistance (ODA) and foreign direct investment (FDI). In 2023, remittances reached approximately $38 billion, accounting for 70% of total external finance in the region. The brief discusses the migration trends, the economic impact of remittances on countries like Egypt, Morocco, and Tunisia, and the challenges in channeling these funds into productive investments. It emphasizes the need for tailored policies and frameworks to leverage diaspora contributions effectively, as well as the ongoing initiatives by the Economic Commission for Africa to strengthen the migration-development nexus.