Remittance fees highest to Sub Saharan Africa

 It costs more to send money to Sub Saharan Africa than to anywhere in the world according to a World Bank report on Migration and Development.

Sending $200 to the region costs 8.2% as compared to the next highest region of East Asia and Pacific, which is 6.9%. The lowest cost of sending that same $200 is 4.9% to South Asia.

The rest are 5.6% to Latin America and the Caribbean, 6.4% to Europe and Central Asia, and 6.6% to Middle East and North Africa.

Experts believe there are two factors influencing the rates. the first one is the volume of remittances. Sub Saharan Africa receives the lowest volume of remittances at $42bilion in 2020.

In contrast, South Asia receives the highest volume of remittances at $147billion in 2020 with the lowest fees at 4.9% to send $200.

East Asia and Pacific has the next highest volume at $136billion. Yet at 6.9%, it cost the next highest fees to send $200 to that region.

Next to volume of remittances, perhaps the most influential factor is the cost of doing business in the particular region. Setting up the financial logistics costs more in developing countries due to a combination of governments’ penchant to tax these services, and what has become known in developing countries as “facilitation’ aka bribes.

Sub Sahara Africa may need to increase her volume of remittances in order to be able to mount a credible argument for lowered fees.

DNT News.

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