A report prepared by the Global Knowledge Partnership on Migration and Development for the World Bank has indicated that the cost of money transfers in Sub-Saharan Africa was the highest.
The report stated that remittances in Sub-Saharan Africa average 8.17 per cent in the fourth quarter of 2020 compared with 4.9 per cent in South Asia, the lowest average cost.
The report added that remittance flows to the sub-Saharan Africa region dropped by 12.5 per cent in 2020. This is the most significant drop in over a decade that could partly be attributed to the Covid-19 pandemic and the huge decline in remittances to Nigeria.
The decline in remittance flows across sub-Saharan Africa was “almost entirely due to a 27.7 per cent decline in remittance flows to Nigeria, which alone accounted for over 40 per cent of remittance flows to the region,” said the report.
The report added that except for Nigeria, remittance flows to sub-Saharan Africa increased by 2.3 per cent.
“Strong remittance growth was reported in Zambia (37 per cent), Mozambique (16 per cent), Kenya (nine per cent) and Ghana (5 per cent).” Remittance flows to the region were affected by “restricted mobility measures and the employment situation in the main host countries” due to the Covid-19 pandemic.
Tanzania-Kenya and Tanzania-Uganda transactions were among the five most expensive corridors. The other three are Angola-Namibia, South Africa-Angola and South Africa-Botswana. Remittance costs from Tanzania to Kenya went up to 17 per cent in the fourth quarter of 2020 compared with 14.5 per cent in the fourth quarter of 2019, while the rise for Tanzania-Uganda increased to a little over 21 per cent in the fourth quarter of 2020.
The cost of diaspora remittances from Tanzania to Kenya and Uganda was among the highest in Africa in the past year, averaging between 17 per cent and 21 per cent per $200.
The top three remittance recipients in Sub-Saharan Africa in 2020 are Nigeria ($17.2 billion), Ghana ($3.6 billion) and Kenya ($3.1 billion).
The report recommended that fees charged must be reduced to increase remittances.
