Remittances Outpace Portfolio Flows in Major African Markets
Money sent home by migrants exceeded net foreign portfolio equity inflows in several large African economies during 2025.
Updated on Nov. 13, 2026 in Investing
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Africa received an estimated $124 billion in remittances in 2025, and inflows exceeded net portfolio equity flows in Egypt, Nigeria, Morocco and South Africa. Net portfolio equity flows to low- and middle-income countries excluding China were negative that year, with net outflows of $21 billion.
Why it matters
The shift shows household transfers becoming a steadier source of external funds than volatile investor capital for several African economies. Analysts link South Africa's equity outflows to domestic policy uncertainty, weak growth and changing global financial conditions, though the extraction does not establish a single cause.
Sub-Saharan remittance receipts rose 9.67% to $41.14 billion in 2025, while the average cost of sending $200 to the region was 8.46% in the third quarter. Net portfolio equity flows to LMICs excluding China totaled negative $21 billion, and the extent to which the cost gap and capital flows will shift in coming quarters has not been established.
The details
Net portfolio equity flows measure purchases and sales of shares and depositary receipts by nonresident investors. Sub-Saharan Africa's net foreign direct investment inflows rose from $43.46 billion in 2024 to $46.92 billion in 2025, and Kenya's Nairobi Securities Exchange removed its 100-share minimum trading requirement.
Timeline
2010: Total net equity inflows to low- and middle-income countries were $371 billion.
2020-2022: Net portfolio equity outflows were recorded during the COVID-19 period.
2025: Remittances exceeded portfolio equity flows in major African markets.
2027: Botswana requires pension funds to invest 50% domestically.
Market Landscape
The 8.46% average cost of sending $200 to Sub-Saharan Africa in the third quarter of 2025 remains far above the 3% target set under UN Sustainable Development Goal 10.c. That gap places the 2025 remittance boom against a long-running effort to make cross-border transfers cheaper.
Investors holding African equities should note that net portfolio flows turned negative across low- and middle-income markets excluding China in 2025. Remittance-driven household demand may support some local consumption even as foreign equity capital pulls back.
The takeaway
Diversified investors should watch how remittance growth and portfolio flows diverge across African markets rather than treating the continent as a single asset class. Tracking both data series gives a clearer picture of where external funding is steady and where it is not.
Further reading
Explore more on Investing to see how portfolio flows like these shape returns for global investors.
Source note: This article includes information reported by Ecofin Agency.
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