Roundtable Context
Remittances are among the most resilient and systemically important financial flows into Africa, reaching an estimated USD 95–100 billion in 2023–2024. In several markets, remittances now match or exceed foreign direct investment and significantly surpass official development assistance.
These flows play a critical role in household resilience, supporting consumption, education, healthcare, and shock absorption during periods of economic stress.
Despite their importance, remittance systems remain structurally constrained. Across many corridors, challenges persist, including:
- High transaction costs
- Wide FX spreads and limited pricing transparency
- Fragmented payment rails and weak interoperability across systems
- Heavy compliance burdens that disproportionately affect smaller providers
- Regulatory asymmetries across sending and receiving jurisdictions
- Uneven digital access, particularly at the last mile
At the same time, global and regional payment systems are undergoing rapid transformation. Mobile money interoperability, instant payment systems, regional settlement platforms, API-driven infrastructure, and emerging digital currency mechanisms, such as stablecoins, are reshaping how value moves across borders.
Together, these trends create both opportunities and tensions, requiring deliberate policy and market coordination.
Key Global Dynamics Shaping Remittances
- Cross-border payments reform is underway but lagging. The G20/FSB roadmap aims to make cross-border payments faster, cheaper, and more transparent by 2027, but progress remains uneven. While infrastructure upgrades exist in select corridors, end-user outcomes, especially cost reduction and transparency, are improving too slowly, particularly for low-value remittances into emerging markets.
- Stablecoins are shifting from a “crypto conversation” to a “payments rail conversation”. Institutions such as the International Monetary Fund and Bank for International Settlements are assessing stablecoins as potential cross-border settlement tools, given their ability to reduce intermediaries, lower costs, and improve access to hard currency. At the same time, these features raise concerns around monetary sovereignty, capital flows, consumer protection, and systemic risk.
- Compliance expectations are tightening in parallel. Financial Action Task Force updates in 2025 expand Travel Rule requirements to virtual asset service providers and heighten scrutiny of fraud, offshore risks, and data standards. Innovation that does not embed AML/CFT and supervisory alignment from the outset will not scale.
- Private-sector experimentation is accelerating faster than regulation. Fintechs, banks, and mobile money operators are actively piloting interoperability layers, alternative settlement models, and stablecoin-based solutions to reduce costs, speed up transfers, and manage FX liquidity. Market experimentation is outpacing regulatory convergence, creating both opportunity and risk, and underscoring the need for structured public–private dialogue.
