Harare (New Ziana)–Sub‐Saharan Africa (SSA) is the costliest region in the world to send remittances with the Covid-19 pandemic worsening the situation, the World Bank (WB) has said.
In its latest Migration and Development Brief report, the WB revealed that sending $200 to SSA cost on average 8.5 percent in the third quarter 2020, which was however a modest decrease compared to the average cost of 9 percent the year before.
Remittance costs are typically reported as the fee one would pay as a percentage of a $200 transfer with the global average cost of sending remittances being 6.8 percent while the Sustainable Development Goal 10 target is 3 percent.
“The relatively less expensive corridors are in West Africa (respectively Cote d’Ivoire to Mali and Senegal to Mali) while the most expensive corridors are in the southern African region: Uganda to Tanzania, South Africa to Botswana, and South Africa to Angola (latest data available only for Q2 2020),” the WB said.
On digital services, the WB said, SSA was doing relatively better than the Middle East and North Africa regions with an average cost of less than 7 percent compared to over 7.5 percent respectively.
“The Covid‐19 pandemic has made it more difficult for migrants to remit money to Sub‐Saharan Africa using traditional or informal channels as most payments are still in cash and some Money Transfer operators are closed due to the crisis.”
The WB added that the promotion of digital technology, which was cheaper than non-digital services, combined with a regulatory environment promoting competition in the remittances market as well as relaxing money‐laundering regulations were essential for Sub‐Saharan countries to achieve the Sustainable Development Goals target of 3 percent by 2030.