…as migrants sent home $60b in 2012
It has been observed that the cost of sending money from abroad to Ghana is one of the most expensive in Africa, according to a World Bank data on remittances released January 28, 2013.
Ghana together with South Africa and Tanzania were the countries the World Bank found to have higher remittance prices with prices averaging 19 percent on cost of sending money to Ghana.
The World Bank attributed the high remittance prices to the limited competition in the market for cross-border payments.
“Remittance prices are even higher between African nations. South Africa, Tanzania, and Ghana are the most expensive sending countries in Africa, with prices averaging 20.7 percent, 19.7 percent, and 19 percent respectively, due to several factors including limited competition in the market for cross-border payments,” said the World Bank’s Send Money Africa database.
According to the Bank, African migrants could save an amount of $4 billion per annum on remittance fees indicating that “African migrants pay more to send money home than other migrant groups.”
It says Africa’s overseas workers sent close to $60 billion in remittances in 2012 and “bringing remittance prices down to 5 percent from the current 12.4 percent average cost would put $4 billion more in the pockets of Africa’s migrants and their families who rely on remittances for survival.”
According to the World Bank, the 12 percent average cost of sending money to Africa is higher than the global average of 8.96 percent, and almost double the cost of sending money to South Asia, which has the world’s lowest prices (6.54 percent).
“High transaction costs are cutting into remittances, which are a lifeline for millions of Africans,” said Gaiv Tata, Director of the World Bank’s Africa Region and Financial Inclusion and Infrastructure Global Practice.
Tata added that 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.
Lower cost remittances also advance financial inclusion, said the World Bank, explaining that since they are often the first financial service used by recipients, who are then more likely to use other financial services including bank accounts.
By Ekow Quandzie