Analysis — The fact that remittances -the money sent home by migrant workers- is often a lifeline for millions of those left behind has been known for a long time. Now, however, the International Fund for Agricultural Development (IFAD) says it has found that the same funds are now being used for another great cause: to mitigate the devastating impacts of climate change on the millions left behind.
"These funds are not just about sending money back home," Pedro de Vasconcelos, the Manager, Financial Facility for Remittances at IFAD, recently told a meeting in Riyadh, Saudi Arabia. "Migrant families are using remittances to improve food security, diversify incomes, and adopt sustainable farming practices like drought-resistant crops and agroforestry."
Pedro de Vasconcelos was speaking at the launch of two reports done by IFAD in collaboration with the UN Convention to Combat Desertification (UNCCD). The two reports -- "Migrant Remittances and Diaspora Finance for Climate Resilience" and "Remittances for Climate Change Adaptation in Mali"-- show that remittances are a vital financial flow that enables rural communities to cope with shocks like droughts, heatwaves, and floods.
Remittances also give poor farming families the financial security to adopt longer-term strategies such as natural soil fertilisation, pest control, and investment in climate-smart agricultural techniques.
The IFAD study showed that households receiving remittances are investing more in climate-resilient activities and products than families not receiving them. But IFAD also says the remittances are not enough to close the climate change adaptation gap in Sub-Saharan Africa and additional resources and broader support are needed.
IFAD echoes the call made at Dubai's COP28 for rich nations to provide an estimated US$400 billion per year by 2030 needed by African nations to adapt to climate change.
"With innovative solutions and coordinated efforts, both remittances and diaspora investments can help safeguard the future of millions across the region. They hold immense potential to drive adaptation efforts in vulnerable communities across Sub-Saharan Africa," said de Vasconcelos.
The reports include examples from regions in Africa and Latin America - including Burkina Faso, Mexico and Senegal. But it says, the potential impact of remittances is hindered by insufficient access to information about "green" investments and tailored financial products for the diaspora.
IFAD advocates for strategic initiatives to address these challenges, including financial tools for larger diaspora investments and better access to information on climate-smart opportunities to maximise the local benefits of remittances for vulnerable communities and scale up their contribution to climate adaptation.
Malian case study
Climate change has in recent years hit hard many countries in Sub-Saharan Africa, destroying livelihoods and driving high levels of migration.
A study done in Mali by IFAD on 400 households from the Kayes and Sikasso regions where subsistence agriculture is predominant, established that receiving remittances creates the necessary conditions for more sustainable adaptation to climate change. In this region, 72% of respondents identified climate change as a major issue for the region given its high exposure to climate hazards.
In the survey, regular remittances averaged US$1,600 per year/household. However, households that do not receive remittances adapt to climate change by restricting their food consumption. Up to 53% of them save out of necessity, to the detriment of their basic needs.
Meanwhile, those receiving remittances can benefit for an extra support of US$225 at a time to cope with an urgent issue; 47% save as a strategy to cope with climate shocks and are able to maintain their level of consumption thanks to it.
An estimated 18.3% of rural households in Mali receive funds from family members working abroad, based on data from the National Malian Institute of Statistics in 2022. The country received US$1.15bn in remittances in 2023, representing 5% of the country's GDP, according to the World Bank. "In this context, remittances are a lifeline for households facing climate shocks," the report says.
"It means a lot to us, it shows us that Malians abroad want to help their country, they're patriots, they haven't forgotten us. They can be reassured that we will use their funds as they wish and where they are needed," says Oumarou Amadou Sankaré, representative of SOPROTRILAD, a Malian company with 400 employees that produces, processes, and markets rice.
Aimée-Noel Mbiyozo, a senior consultant on migration at the Pretoria-based Institute for Security Studies, makes the same point in a recent policy brief titled, 'Remittances can help fill funding gaps for climate adaptation'. She notes how migrant remittances are a potent but undervalued and underexplored instrument in building climate resilience.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
"They are often the most direct link between migration and development, and are consistent, equitable and resilient. They could bolster households' resilience to climate change impacts," she notes.
Mbiyozo notes that remittance flows to Africa reached nearly US$100 billion in 2022, and accounted for almost 6% of Africa's gross domestic product (GDP). They exceeded official development assistance (US$ 3 billion) and foreign direct investment (US$52 billion).
Potential of remittances
Some estimates put the number of African migrants around the world at over 40.4 million and these are said to be supporting about 200 million family members to have stable incomes, make informed migration decisions or stay and adapt.
Meanwhile, Mbiyozo says some returning migrants play a role in climate adaptation as they can invest in their home communities through financial and non-financial remittances, such as skills, technologies, innovations and entrepreneurial approaches.
In 2023, the African diaspora sent US$90 billion in remittances, matching Official Development Assistance (ODA) and doubled the amount of Foreign Direct Investment, according to World Bank data.
