ABA Editorial · Dec 10, 2025 · 13 min read
Africa received approximately USD 100 billion in remittances in 2024, roughly double overseas development assistance to the continent. LemFi processes over USD 1 billion monthly. Nala raised USD 40 million. Inside the diaspora fintech boom, the 8.2 percent average cost that is still too high, and why the cedi's 40 percent appreciation briefly crashed Ghana remittance inflows by 50 percent.
For decades, remittances have been Africa's largest source of external financial flow. Not foreign direct investment. Not official development assistance. Remittances. According to the World Bank, Africa received approximately USD 100 billion in remittances in 2024, roughly double the volume of overseas development assistance flowing to the continent. The African Development Bank has noted that remittances have exceeded both ODA and FDI flows to Africa since 2010. If you want to understand where the money keeping African households afloat actually comes from, you look at the diaspora, not the donor conferences.
What changed in 2024 and 2025 is the way that money moves. A generation of African-founded remittance fintechs, including LemFi, Nala, Chipper Cash, Sendwave, Grey, and Leatherback, are compressing the cost of sending money home and, in the process, routing billions more in real terms to recipient households. This is a market report on the African diaspora fintech sector in 2026, the numbers driving it, and the structural problems it has not yet solved.
The headline figure of USD 100 billion in annual remittances to Africa comes from 2024 World Bank estimates cited by multiple sources including UN Women and the African Development Bank. According to the AfDB working paper published March 2025, Egypt became Africa's largest remittance recipient in recent years at approximately USD 28.3 billion in 2022 (29.1 percent of Africa's total), followed by Nigeria at approximately USD 20.1 billion (20.7 percent), Morocco at approximately USD 8.7 billion, Ghana at approximately USD 4.1 billion, and Kenya at approximately USD 3.3 billion. In absolute dollar terms, these five countries receive the majority of African inbound remittances. In proportional terms, remittances are even more important for smaller economies: they account for more than a fifth of GDP for The Gambia, Lesotho, and Comoros, and more than a tenth for Liberia, Cape Verde, and Guinea-Bissau.
The African diaspora itself is estimated at more than 40 million people globally, roughly doubled from 1990 to 2020, according to AfDB data. They send money from the Gulf States, North America, and Europe predominantly, though intra-continental remittance flows are growing.
Sending money to Africa remains the most expensive remittance corridor in the world. According to the RemitSCOPE Africa database maintained by the International Fund for Agricultural Development, the average cost of sending money to Africa fell from 9.8 percent in Q2 2016 to 8.2 percent in Q1 2025, a decline of 1.6 percentage points over nearly nine years. At that rate of progress, Africa will fail to meet the UN Sustainable Development Goal 10.c target of reducing remittance costs to an average of 3 percent by 2030. Regional variation is significant: Q1 2025 costs were 5.9 percent for sending to West Africa, 8.9 percent for Southern Africa, and 9.9 percent for East Africa.
The intra-African figures are worse. In Q4 2023, average fees for sending USD 200 from Tanzania to Kenya, Uganda, and Rwanda were approximately 33 percent, according to World Bank pricing data cited by CNN. That is the direct cost of fragmented cross-border payment infrastructure, and it is the problem PAPSS is designed to solve.
Historical remittance fees to Africa ranged between 7 and 12 percent per transaction. The new generation of diaspora fintechs has compressed that to 1 to 3 percent in most corridors, and in some cases to nothing. For a Ghanaian family receiving USD 300 a month, a fee compression from 12 percent to 3 percent means USD 291 arriving instead of USD 264, a difference of USD 27 per month or USD 324 per year in recovered income. In a country where median household income remains well under USD 3,000 annually, that is not a rounding error.
LemFi, founded in 2020 by Ridwan Olalere and Rian Cochran, is the clearest scale story in African diaspora fintech. In January 2025, LemFi raised USD 53 million from Silicon Valley investors after crossing USD 1 billion in monthly transaction volume. The UK-headquartered company has more than one million active users sending primarily from Europe and North America to African destination countries. In late 2024, LemFi expanded its European footprint with launches in France, Germany, Italy, and Norway. Olalere has told reporters that traditional banks in Europe do not support remittances to Africa "without a lot of hassle," citing documentation burden and multi-day settlement times, which is the market gap LemFi is filling.
Nala, founded in Tanzania in 2017, raised USD 40 million in July 2024 in a round that included tech-focused African VC firm Norrsken22. In early 2025, Nala expanded into the Philippines and Pakistan, targeting migrant labor populations that include Africans but also broader South and Southeast Asian corridors. Nala operates in 11 African destination countries and has positioned itself on cost reduction of 50 to 70 percent versus traditional banks.
Sendwave, owned by London-based Zepz Group, has become particularly dominant in Ghana-UK and Ghana-US corridors. Chipper Cash, founded by Ham Serunjogi and Maijid Moujaled, operates a broader financial ecosystem that combines remittances with multi-currency wallets and even US stock investing. Grey, a Nigerian-founded fintech accepted into Y Combinator in 2022, quietly passed one million users by August 2024 and has expanded beyond West Africa.
The operational pattern is the same across all of these companies. They hold liquidity in every country in which they operate, allowing them to deposit funds directly into local bank accounts or digital wallets of recipients instantly. They use their own software wherever possible to move money around. They run their own FX trading teams to negotiate rates rather than relying on third-party traders. And they cut out the middlemen (correspondent banks, SWIFT routing, interbank FX traders) whose historical cuts made African remittances so expensive in the first place.
Something interesting happened in Ghana in mid-2025. The Ghanaian cedi appreciated dramatically against the US dollar, gaining over 40 percent. According to Bank of Ghana Governor Dr Johnson Pandit Asiama, Ghana saw a nearly 50 percent decline in remittance inflows in mid-2025 as diaspora senders paused transfers and re-evaluated the exchange rate math. When the cedi strengthens, the dollars relatives send buy less. Fintech apps can make transactions faster and cheaper, but they cannot fix currency volatility.
By December 2025, cumulative Ghanaian remittances had recovered to approximately USD 7.79 billion for the year, suggesting the disruption was temporary and that senders eventually adapted to the new exchange rate environment. But the episode is a reminder that digital remittance infrastructure, for all its efficiency, is still exposed to the same macro forces that have always governed cross-border money flows. Infrastructure does not neutralize currency risk.
The most significant structural change coming to African remittances is PAPSS, the Pan-African Payment and Settlement System. Launched in 2022 by the African Export-Import Bank and the African Union, PAPSS is designed to enable cross-border payments in local currencies, bypassing the need to convert into US dollars for settlement. By mid-2025, PAPSS connected 17 African countries, 14 national switches, and over 150 commercial banks. It is the infrastructure layer that could, in principle, make intra-African remittances as cheap as domestic transfers within each country.
In July 2025, PAPSS launched two new products: PAPSSCARD (Africa's first continental card scheme, unveiled on 27 June 2025 at the 32nd Afreximbank Annual Meetings in Abuja) and the PAPSS African Currency Marketplace (PACM, launched 7 July 2025), which allows direct peer-to-peer exchange of African currencies. PACM's pilot phase saw more than 80 African corporates transact across 12 currency pairs with all settlements in local currencies. These tools are primarily aimed at B2B and institutional flows, but they also create the foundation for cheaper intra-African retail remittances if and when they are integrated into diaspora fintech platforms.
Three things. First, whether LemFi, Nala, and peers expand their intra-African corridor offerings by integrating with PAPSS rails, which would meaningfully compress the 33 percent average Tanzania-Kenya corridor cost. Second, whether additional African countries join LemFi's kind of "send from diaspora" corridor approach with new specialized players serving the Horn of Africa (Somalia, Ethiopia) and Francophone West Africa corridors, which remain underserved. Third, whether African governments move from treating remittances as charity flows to treating them as strategic capital, with instruments like diaspora bonds, tax incentives for formal transfers, and investment products tailored to diaspora investors. Bangladesh's 2.5 percent cash incentive for formal transfers and the Philippines' OWWA are models that African governments have been studying but have not broadly implemented.
In the meantime, USD 100 billion a year flows back to African households whether policy catches up or not. The question is how much of it arrives, and at what cost.
This report draws on 2024 World Bank remittance inflow data; the UN Women Dakar Regional Conference on Sustainable Philanthropy and Remittances for Gender Equality (June 2025); the African Development Bank working paper "Making Remittances Work for Africa" (March 2025); RemitSCOPE Africa regional and country-level data; Semafor coverage of LemFi's USD 53 million round (January 2025); CNN reporting on African remittance costs and fintech operators (February 2025); Techlabari analysis of Ghana diaspora fintech dynamics; and the Institute for Security Studies African Futures analysis on rethinking remittances (August 2025).