Sub-Saharan Africa Remains The Region With The Highest Remittance Costs – World Bank Report
A recent World Bank report has revealed that Sub-Saharan Africa remains the region with the highest remittance costs, with fees rising as high as 36 percent for every $200 sent from abroad.
The average cost of sending $200 to the Sub-Saharan Africa region slightly increased, in the second quarter (Q2) of 2023, averaging 7.9%, compared with 7.2% in the second quarter (Q2) of 2022.
Remittances to Nigeria in 2023, accounted for 38 percent of remittance flows to the region, while two other major recipients, Ghana and Kenya, posted estimated gains of 5.6 percent and 3.8 percent, respectively.”
Part of the World Bank report reads,
“Sub-Saharan Africa remains the region with the highest remittance costs. The average cost of sending $200 to the Sub-Saharan Africa region slightly increased, averaging 7.9% in 2023 Q2, compared with 7.2% in 2022 Q2.
“A stable price has been observed in remittance costs in the region since 2021, but this average remains far above the global average of 6.9% and the SDG target of 3% by 2030. Costs vary substantially across the region, ranging from 1.3–4.5% in the lowest cost corridors to 17–36% in the highest. For example, sending $200 in remittances from Tanzania to neighboring Uganda would have cost a migrant 39.1% in 2023Q2.”
Regional growth in remittances in 2023 was largely driven by strong remittance growth in Rwanda (16.8 percent), Ethiopia (16 percent), and Mozambique (48.5 percent). Nigeria remained the largest remittance-recipient country in Sub-Saharan Africa, with $20.5 billion, a slight increase compared with the previous year.
The World Bank report however identified traditional banks as major players in the increase of remittance fees, noting that Banks charge the highest costs, highlighting the importance of cross-border mobile money transactions to ease costs.
It turns out that banks charge much more to remit sums in the US$200-500 range across the continent. The bank further projects that remittances to the sub-Saharan region region will keep increasing, to $55bn by 2024.
