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The Role of Remittances from the UK to the Gambia in Post-Pandemic Economic Recovery

The Role of Remittances from the UK to the Gambia in Post-Pandemic Economic Recovery

26 Oct 2023

Gambian expats who send money to Gambia from the UK saved their country during the 2019 pandemic. Due to the vital role that remittances from the United Kingdom to the Gambia play, there is cause for hope in a post-pandemic world among these dynamics. Remittances have a significant influence on economic growth, particularly in poor countries.

Remittances weren't only lifelines for money and strands of hope that linked far-off places across international boundaries and woven stories of tenacity. To promote the post-pandemic economic recovery in the Gambia, this article examines the role of remittances from the UK. It will look at the elements that made remittance flows resilient, the effects of remittances on consumption, investment, and financial inclusion, as well as the difficulties and possibilities for improving remittance services.

What are Remittances?

Remittances are the financial gifts that migrants provide to their loved ones and communities back home. For many poor nations, particularly those in Africa, remittances are an essential source of income and foreign currency. Remittances to low- and middle-income nations hit $540 billion in 2020, the World Bank estimates, surpassing government development aid and foreign direct investment.

Importance of Remittances 

Many nations' economic development depends heavily on remittances. When Gambian expats do money transfers from the UK to Gambia, it gives many people a source of income while also assisting in the reduction of poverty and improving healthcare and education.

Reduction of Poverty

By providing resources for necessities like food, clothing, and housing, they play a crucial part in reducing poverty and improving the standard of living for many people.

Economic Expansion 

Remittances can greatly boost the GDP at the country level, promoting economic expansion, particularly in nations that primarily rely on remittance inflows.

Exchange-rate reserves

They help to increase a country's foreign exchange reserves, which helps to stabilise the domestic currency and promote global trade.

Development Initiatives

Remittances are frequently used by governments to fund infrastructure, healthcare, and educational projects, which promote development and long-term sustainability.

Crisis Adaptability

When there is an economic downturn or a natural calamity, remittances can serve as a financial safety net, ensuring that receivers have access to resources when they are most needed.

Country Development

By providing the funding required for important initiatives, they can significantly contribute to the advancement of a nation's development goals.

Relationship between Remittances and Gambia 

One of the nations that relies significantly on remittances is The Gambia. Remittances made up 15.6% of its GDP in 2019, ranking second after tourism as the country's main source of foreign currency. The United Kingdom, where an estimated 35,000 Gambians live, is where the majority of remittances to the Gambia originate from.


The global economy and remittance movements have faced unprecedented hurdles as a result of the COVID-19 epidemic. Due to lockdowns, travel restrictions, and employment losses in the host nations, the World Bank initially predicted a substantial decrease in remittances to sub-Saharan Africa of 23.1% in 20204. Remittances to the Gambia, however, exceeded forecasts by rising by 89.3% year over year in the second and third quarters of 2020, reaching a record high of $677 million at the end of the year.

Causes of Remittance Flows’ Resilience

During the COVID-19 pandemic, overseas remittances have become even more critical to the Gambian economy. The durability of money transfers from the UK to Gambia during the pandemic has been attributed to several causes. Some of these elements include:

Love for Family 

Gambian immigrants had a strong feeling of camaraderie and generosity, increasing their assistance for their families and communities in reaction to the health and economic crises.

Change of money transfer channels 

Due to travel restrictions and border closures that hampered cash couriers and other unregulated means, money transfer channels changed from informal to formal. The adoption of Internet banking, mobile money, and fintech applications made it possible for remittance transactions to be quicker, less expensive, and safer.

Financial Stability

By supplying a consistent source of income, remittances can aid in the economic stability of the recipient's home nation. This is crucial for nations whose economies are undiversified and who depend on a small number of exports. Remittances can help mitigate the loss if these exports go out.

Changes in Exchange Rate

Another source of resilience against variations in exchange rates is remittances. Remittances gain in value if the value of the home country's currency improves because they are frequently transferred to foreign currency. This can act as a buffer against economic shocks and help to stabilise the domestic economy.

Social Elements

Remittances can be a lifeline for households back home on a local level. They can be used for living expenses, education, medical care, and other costs. Both poverty reduction and human capital development may benefit from this.

Remittances’ Effect on the Expansion of the Economy

Remittances have a significant influence on economic growth, particularly in poor countries. When Gambian expats do UK to Gambia money transfersit contributes to the GDP of Gambia by providing much-needed money that stimulates economic expansion. By raising recipient households' disposable income, remittances promote consumer spending and energise regional economies. 

Additionally, they encourage investments in a variety of fields, such as real estate and small enterprises, which promotes entrepreneurship and job growth. This economic boost not only improves a nation's overall economic stability but also helps families become more resilient financially. As a result, a nation's economy must grow and be sustained over the long run.

  • By raising the home recipient's income and consumption, remittances lessen poverty and inequality. In an August 2020 World Bank study, 16% of Gambian households stated that international money transfers were one of their top three sources of income during the previous 12 months. 
  • By supplying money for profitable pursuits, including manufacturing, trade, services, and agriculture, remittances foster investment and entrepreneurship. Remittances also improve recipient households' and companies' access to credit and financial services. According to a survey by the International Fund for Agricultural Development (IFAD), 40% of rural recipients of remittances invested some of their funds in companies, cattle, or other real estate.

Households can afford higher quality and more extensive health and education services thanks to remittances, which enhance their well-being, skills, and knowledge. According to a UNICEF study, children in the Gambia whose families receive remittances enrol in school at a higher rate than children whose families do not.

Also read: The Impacts of Increased Remittances on Rural Life in the Gambia

ACE Money Transfer is one of the safest methods to send money from the Gambia to the UK. ACE Money Transfer offers top-notch security measures to assist you with your money transfers. ACE Money Transfer checks the sender and recipient's identity. Before the transaction, ACE Money Transfer offers tools and technology that show the identity of both parties. For this procedure, it has worked with the best verification firms in the globe. 

The Way Forward 

The rehabilitation of the Gambia's economy after the pandemic has been greatly aided by remittances from the UK. Gambian migrants send money from the UK to Gambia due to their solidarity and generosity. During the COVID-19 crisis, remittances have exhibited extraordinary resilience during the crisis. Remittances have a favourable effect on macroeconomic stability, consumption, investment, and the elimination of poverty. They stimulate investments across a range of industries, including real estate and small businesses, which encourages entrepreneurship and job expansion. This economic improvement not only strengthens a country's overall economic stability but also enables families to become more resourceful. Therefore, remittances help countries in expanding their economy. 


How do remittances from abroad impact economic growth?

Remittances are one of the important drivers of foreign capital inflow, which is crucial for GDP growth and the eradication of poverty by boosting income investment, lowering credit restrictions, and advancing HDI. Remittances have been a key part of Pakistan's economy since 1970.

How much money is sent to The Gambia in remittances?

The Central Bank stated that the verified amount for remittance inflows to The Gambia by December 2021 was $774.6 million at the Fifth Stake in the Nation Forum (SNF5) on January 8, 2022. This represents 62.9% of the GDP.

How large is the UK's remittance market?

The market for digital remittances is anticipated to reach US$3.36 billion in transaction value by 2023. By 2027, it is anticipated that transaction value will have grown by an average of 5.29% (CAGR 2023–2027), totalling US$4.13 billion.



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