According to the Africa development bank-
ADB, the official remittance flows to the continent grew to a record $60.4 billion
in 2012 — overtaking foreign direct investment and official development
assistance as the largest external financial source for the first time.
Africa is the most expensive continent to send money to, with transfers
costing an average of 11.67 percent of the amount being sent, compared with
about 8.35 percent for Asia. The global
average cost is slightly more than 9 percent.
An average transaction cost of 11.6 percent would have deprived some of the
world’s poorest people
of more than $7bn in 2012, the World Bank says.
There are other expenses besides the transaction fees.
Africa has the least payout locations in
the world, which means recipients who live in rural areas face the prospect of
travelling for a day or more to collect their money.
Intra-African transfers are even more costly — in South
Africa and Tanzania average remittance prices
are 20.7 percent and 19.7 percent respectively.
The high costs force migrants to send money through informal channels so the
true size of remittance flows to Africa could
be more than double the official figure, some experts believe.
Monday, 10 June 2013
Remittance costs squeeze Africa’s poor.
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