IGAD and UNCDF Announce Agreement to Formalize, Enhance Regional Remittance Flows

  • May 24, 2021

  • New York, New York USA and Djibouti, Djibouti

Press Contacts:


Mahamed A. Abdillahi
Communication Officer
T + 253 21 353 529 M + 253 77 079 003

Anne Folan


Technical assistance collaboration will review relevant policies and regulations, promote cross-border coordination to shift remittances into safer, more transparent formal channels

The Intergovernmental Authority on Development (IGAD) and the United Nations Capital Development Fund (UNCDF) today announced that they have entered into a two-year agreement to support the harmonization of remittance policies across the IGAD countries of Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda. Remittances, the cross-border payments that migrants living and working outside their country of origin send back home to loved ones, are at the moment subject to a patchwork of policies and regulations that may differ significantly from one region to another, or even from one country to another within the same region. The multiple guidelines governing everything from acceptable forms of personal identification, maximum transaction sizes, licensing requirements for money-transfer providers, and other factors combine to create a formal remittance market that can be difficult for customers to navigate, a factor which drives them to use less transparent and riskier informal alternatives.

In close collaboration with the region’s member states and with the IGAD secretariat’s technical experts, UNCDF will map out all the relevant policies and regulations within each IGAD country. The team will then analyze them to see contradictory or inconsistent guidelines, suggest priority areas for harmonization, and propose concrete steps for implementation. These efforts are all ultimately aimed at keeping remittances flowing in this region where they are vitally important, and shifting more of them from the informal unregulated networks and into safe, regulated, and transparent channels.

“This partnership with UNCDF represents a continuation of IGAD’s history of support to our Member States, and ultimately to the individuals and families of the region,” said His Excellency Dr Workneh Gebeyehu, Executive Secretary of IGAD. “The work that our two organizations now undertake together will strengthen central banks and other government stakeholders, which will in turn promote increased remittance flows through formal channels, and contribute to the implementation of IGAD's Migration Action Plan 2015-2020, including its specific strategic priorities on remittances.”

Along with harmonizing the policy and regulatory frameworks that govern remittance flows, the IGAD/UNCDF initiative will seek to build a robust body of market research, with data about both the supply and demand for remittance services. Key to the initiative will be also to understand how remittances, if shifted from cash to digital channels, could be the gateway for migrants and their families to other value-added financial products that could build their resilience and financial health. Towards that end, IGAD and UNCDF will also facilitate peer-learning exchanges between key stakeholders including that of the IGAD Secretariat, central banks and other relevant authorities together with remittance service providers and other private-sector actors so that all stakeholders may learn first-hand about each other’s constraints, priorities, goals, and incentives.

“As the agency designated by the United Nations as the capital-providing fund, first and foremost, for the least developed among the developing countries, UNCDF is deeply committed to building inclusive digital economies that leave no one behind,” said Preeti Sinha, Executive Secretary of UNCDF. “The partnership we announce today with IGAD holds real promise to ensure that that the power of digital financial services and products—products that can begin with remittances but should not end there—can be harnessed for the benefit of migrants and their families.”

The initiative is supported by Sida, the Swedish International Development Cooperation Agency, as part of its broad strategy of engagement with African stakeholders including the African Institute of Remittances (AIR), the African Union, and the regional economic communities towards harmonization of payment infrastructure, policies, and regulations.

“Sida congratulates IGAD and UNCDF on this milestone,” said Ulla Andrén, Sida’s head of regional development cooperation in Africa. "Sweden has been a partner to IGAD since 1986 and we are glad to support this very important project with UNCDF that will help IGAD and its member states to realize its strategic priorities on remittances that will assist the migrants and their families.”

In light of the ongoing COVID pandemic, IGAD and UNCDF held the inaugural ceremony virtually on 20th May.

— ### —

The Intergovernmental Authority on Development (IGAD) is one of the eight Regional Economic Communities (RECs) and building blocks for the African Union. IGAD was established in 1996 to supersede the Intergovernmental Authority on Drought and Development (IGADD) which was founded in 1986. The new and revitalized IGAD was launched during the 5th Summit of IGAD Assembly of Heads of State and Government held on 25-26 November 1996 in Djibouti. The Summit endorsed the decision to enhance regional cooperation in three priority areas of food security and environmental protection, economic cooperation, regional integration and social development peace and security.


The UN Capital Development Fund makes public and private finance work for the poor in the world’s 46 least developed countries (LDCs). UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s financing models work through three channels: (1) inclusive digital economies, which connect individuals, households, and small businesses with financial eco-systems that catalyze participation in the local economy, and provide tools to climb out of poverty and manage financial lives; (2) local development finance, which capacitates localities through fiscal decentralization, innovative municipal finance, and structured project finance to drive local economic expansion and sustainable development; and (3) investment finance, which provides catalytic financial structuring, de-risking, and capital deployment to drive SDG impact and domestic resource mobilization.