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The Impact of the Remittance Industry on the Gambian Economy - All You Need to Know

The Impact of the Remittance Industry on the Gambian Economy - All You Need to Know

09 Nov 2023


Gambia is one of the African countries whose people have been reeling from acute poverty and cannot find a reasonable means of living. They, therefore, travel to developed countries for work to earn a living and send money to Gambia to offer financial support to their families back home.

 

According to Mr C Omar Kebbeh, who is a famous Gambian statistician based in the US, about 141,000 Gambian migrants are living in different countries worldwide. They have been making significant contributions to the country’s economy through the inward remittances they send back.

 

A World Bank report said that the Gambian migrants sent back a little over $600 million in inward remittances to the country in 2022. This amount was a little higher than a little over $540 million in 2021.

 

These remittances have been serving the Gambia in multiple ways as remittances to developing countries have always been a financial lifeline.

 

But imagine where the quantum of remittances to most developing countries runs into billions, the Gambian has just reached a little over half a billion.

 

But you know despite all of this, remittances have been a major boost to the Gambian economy.

 

Additionally, the remittance industry has also played a significant role in giving a boost to the flow of remittances to the country.

 

This blog will shed light on inward remittances and the global remittance industry's role in uplifting the Gambina economy.

 

Role of Inward Remittances to the Gambia Impacts on the Economy

Remittances, as stated earlier, serve developing countries like the Gambia as financial lifelines. A few reasons how remittances impact the Gambian economy are explained below.

 

Household Dependence

A majority of the households in the Gambia are financially dependent on inward remittances. Since these households do not have any other means of earning, their financial dependence centres around inward remittances.

With a reasonable income abroad, you are likely to lead to financially decent and viable life for which it is essential that you, as a Gambian migrant, travel to and work in Countries That Pay The Most To Expatriate Workers.

 

Circulation of Money

For any economy to develop and prosper, the circulation of money is the key. It is the antithesis of the concentration of wealth. And every money transfer to Gambia contributes to the circulation of money in one way or the other.

 

Investment Opportunities

With meagre resources, people cannot invest money in businesses. Because what they earn is exhausted in fulfilling life’s basic needs. However, remittances provide a financial buffer to the people in which they can invest.

 

Job Opportunities

With investments in different industries, several job opportunities are created. And inward remittances to the Gambia trigger investments in different industries, for example, the construction industry, which creates work opportunities for the jobless.

 

Boost to Foreign Exchange Reserves

A country’s imports and exports largely depend on the quantum of foreign exchange reserves. With huge foreign exchange reserves, a country can import more which has a positive trickle-down effect on the economy as a whole.

 

Ensuring Quality Education

All parents wish to provide quality education to their children. But in developing countries, quality education is either too expensive or non-existent. Inward remittances, however, enable people to provide quality education to their children which, in turn, helps them with a financially secure future.

 

Savings for the Rainy Days

Most of the Gambians are unable to save owing to their meagre resources. They barely manage running expenses. But inward remittances help beneficiaries save money for the future, and emergencies. For a better understanding of all of it, a look at the Gambian economy is essential.

 

The Flailing Gambian Economy

  • In 2021, the nominal GDP of the Gambia was just $2.04 billion, according to a World Bank report.
  • In another report, the World Bank said that the country’s GDP per capita income in 2021 was a mere $772.2.

These economic statistics can give you a fair idea about what role remittances are playing in boosting the Gambian economy. This is the result of the Gambian migrants who work in foreign countries against all the odds and send money to Gambia online to financially aid their families back home. However, this financial aid has multiple positive impacts on the country’s economy, some of which have been explained above.

 

So far, for the financial contribution inward remittances are playing in the uplift of the Gambian economy. Let’s now look at how the remittance industry is impacting the Gambian economy.

 

Impact of the Digital Remittance Industry on the Gambian Economy

How the digital remittance industry is impacting the Gambian economy is briefly explained below.

 

Feasible and Convenient

Digital remittance services have made it easier to send and receive funds without having to travel long distances which incurs costs. These have also diminished the need to have complete paraphernalia such as banks to process remittances.

 

Promotion of Legal Channels

With the advent of digital remittance services, legal channels for transferring remittances have come forth. People prefer to send money using legal channels through which inward remittances are integrated into the formal economy, properly recorded and taxed and in turn, boost the economy.

 

Speed, Safety and Efficiency

Digital remittance service providers such as ACE Money Transfer help you send funds in an instant and safely. The services of these service providers are fully protected and ensure safety from scams.

 

Market-Competitive Exchange Rates

While transferring funds to the Gambia from overseas with online remittance service providers, you get live and market-competitive currency exchange rates. These rates add to your savings and offer you a cost-effective money transfer deal.

 

Low Service Charges

Against the traditional methods of remittance transfers, digital services, offer services immersed in several benefits some of which have been highlighted above. But the best part is that some of these service providers, charge you a low fee against your expectations of paying more, because of certain service features.

 

In addition to the Quantum of Inward Remittances

The advent of digital remittance transfer services is surely one of the major reasons for an increase in the quantum of inward remittances. Now you have several trustworthy channels at your disposal to send money in an instant without any doubts and apprehensions that surrounded online money transfers before.

 

Wrapping Up the Discussion

For a financially feasible and cost-effective online money transfer to Gambia, choosing ACE Money Transfer is a wise decision due to the firm’s unique service features. These together will help you financially as a single household as well as create a positive impact on your country’s struggling economy.
 

Frequently Asked Questions (FAQs)

 

What role do inward remittances play in the Gambian economy?

Inward remittances to the Gambia play a significant role in boosting the country’s economy by creating job and investment opportunities. They also provide foreign exchange reserves.

 

Why do the Gambians work abroad?

The People of the Gambia find opportunities in developed countries because they cannot find sustainable means of earning in their native country.

 

Why should Gambian migrants use digital remittance services?

Because these services are safe, efficient and cost-effective in terms of offering market-competitive exchange rates, charging a low fee and having a wider network and easy access.

 

How are digital money transfer services boosting the flow of remittances?

 

Digital remittance services deliver funds from overseas with efficiency and ensure timely delivery. These services help the recipient government record remittances on the one hand, and discourage the use of illegal channels, on the other. The remittances sent this way are integrated into the formal economy, benefiting the government.

 

What doubts surround traditional money transfer services?

Some of the doubts include high fees, uncompetitive currency exchange rates, long time to deliver funds and safety.


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