WB: Africans pay most to send money home
2013-01-29 11:42
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Washington - African migrants around the world pay more than
other groups to send money back home, costing them and their families a hefty
$4bn a year, the World Bank said on Monday.
The development lender said Africa's overseas workers sent
close to US$60bn in remittances in 2012, but paid a premium over other migrant
groups to do so.
"High transaction costs are cutting into remittances,
which are a lifeline for millions of Africans," Gaiv Tata, director of
financial inclusion in the World Bank's Africa Region.
"Remittances play a critical role in helping households
address immediate needs and also invest in the future, so bringing down
remittance prices will have a significant impact on poverty."
Sub-Saharan Africa was the most expensive region in 2012.
The average remittance cost there was 12.4%, compared with 8.9% worldwide and
6.5% in South Asia, the lowest cost region, the bank said.
The bank noted that leading developed countries had set a
target of 5.0% for the average remittance price by 2014.
"Governments should implement policies to open the
remittances market up to competition" to help bring down money transfer
prices, said Massimo Cirasino, manager of the Financial Infrastructure and
Remittances Service Line at the World Bank.
Banks - the most expensive remittance service providers -
are often the only channel available to African migrants, the World Bank said,
and remittance costs were even higher between African countries.
South Africa was the most expensive destination country in
Africa, with prices averaging 20.7%, followed closely by Tanzania and Ghana,
"due to several factors including limited competition in the market for
cross-border payments".
