Harnessing the Power of Remittances: Senegal's Strategy for Inclusive Growth

At a high-level forum commemorating the International Day of Family Remittances (IDFR), the International Fund for Agricultural Development (IFAD) and its partners emphasized the transformative potential of migrant remittances in Senegal, especially for rural communities. Held under the theme “Maximizing the Impact of Remittances: For Inclusive and Sustainable Development,” the event brought together key stakeholders from government, development agencies, and civil society to strategize how to better leverage these funds to advance economic empowerment and resilience.

A Vital Lifeline for Rural Households

Remittances have become a cornerstone of Senegal’s economy, amounting to more than 1500 billion West African CFA francs (XOF) — over US$2 billion — in 2022 alone. These funds now constitute nearly 10% of the country’s GDP, placing Senegal among the top remittance-recipient countries in Africa. A significant share of these financial inflows goes directly to rural households, often reaching areas overlooked by formal development financing.

According to Matteo Marchisio, IFAD’s Country Director for Senegal, “Remittances are not merely private transfers — they are a lifeline for millions and a catalyst for financial inclusion, resilience, and rural transformation.” He emphasized IFAD’s commitment to enhancing the development impact of these flows through innovative partnerships and financial literacy programs.

Beyond Consumption: Unlocking Development Potential

While remittances traditionally support basic consumption needs, such as food, housing, healthcare, and education, the focus of this year’s IDFR event was on moving beyond consumption toward productive investment and savings. Discussions revolved around how to encourage recipients to invest in income-generating activities, adopt digital financial tools, and build long-term economic resilience.

To this end, participants highlighted the importance of creating a supportive policy and financial ecosystem, including:

• Promoting low-cost digital remittance channels and mobile banking services.

• Encouraging financial literacy among remittance recipients, particularly women and youth.

• Fostering diaspora investment vehicles in agriculture, real estate, and renewable energy sectors.

• Expanding microinsurance and savings-linked products tailored for rural users.

The event also emphasized the need to lower global remittance transfer costs, with a target of below 3% by 2030, in line with Sustainable Development Goal (SDG) 10.7.

Human and Economic Bridges

Representing the Italian Agency for Development Cooperation (AICS), Regional Director Giovanni Grandi echoed the call for stronger development frameworks. “Remittances are not just financial flows,” he stated. “They are human and economic bridges — linking migrants to their homelands and creating pathways for rural development, especially in Senegal where the diaspora plays a vital economic role.”

Grandi also highlighted AICS’s investments in projects that empower families, support inclusive financial systems, and align with Senegal’s national development plans.

A Global Leadership Role for Senegal

Senegal is rapidly becoming a thought leader in the global debate on remittances and migration. The country is actively contributing to the policy discussions leading up to the Fourth International Conference on Financing for Development (FfD4), scheduled for 30 June–3 July 2025.

Senegal’s delegation has called for greater recognition of remittances as a core element of the sustainable development financing architecture, urging international donors and multilateral institutions to integrate diaspora flows into national planning and poverty reduction strategies.

A Decade of Global Impact

Globally, more than 200 million migrants send money to over 800 million family members, many of whom live in rural areas. In the past decade, remittance flows exceeded US$5 trillion, surpassing official development assistance by a wide margin. IFAD data shows that more than 35% of global remittances are received in rural areas, where development needs are greatest and formal financial services are scarce.

The International Day of Family Remittances, celebrated each year on 16 June, recognizes the resilience, contribution, and sacrifices of migrants who, despite challenges, continue to support their families and communities.

Looking Forward

As climate challenges and financing gaps continue to grow in the developing world, the need to unlock the full development potential of remittances is more urgent than ever. Through events like this, Senegal, supported by partners such as IFAD and AICS, is demonstrating a proactive approach — one that blends financial innovation, rural development, and inclusive growth.

Stakeholders agreed that policy integration, digital transformation, and diaspora engagement are key levers in building a more resilient and self-sustaining rural economy, where remittances serve not only as survival tools but as springboards to prosperity.