This is the most expensive place to send money in the world

The cost of remitting to Sub-Saharan Africa is the most expensive compared to other regions, according to a new report. The report prepared by the Global Knowledge Partnership on Migration and Development for the World Bank noted that the cost of remitting to Sub-Saharan Africa averaged 8.6% compared to 4.9 % in South Asia, which is the lowest.

“Sub-Saharan Africa is the most costly region to send remittances to, but there is heterogeneity across the region. The most expensive corridors are observed mainly in the Southern African region,” the report noted. 

The report found that cost of sending money from Tanzania to Kenya and Uganda was among the highest in Africa in the past year, averaging between 17 percent and 21 percent per $200. It further noted that sending money varied across corridors in the region.

Tanzania-Kenya and Tanzania-Uganda were rated as the most expensive among the five most expensive corridors alongside Angola-Namibia, South Africa-Angola, and South Africa-Botswana.

According to the report, the remittance costs from Tanzania to Kenya went up to 17 percent in the fourth quarter of 2020 compared with 14.5 percent in the fourth quarter of 2019, while the rise for Tanzania-Uganda was even steeper from 15.2 percent in the last quarter of 2019 to just over 21 percent in the fourth quarter of 2020.

The lowest-cost corridors in the region averaged three percent for transfers primarily to the Philippines, while the highest-cost corridors, including Tanzania-Kenya and Tanzania-Uganda, averaged 13 percent.

Despite the high cost of remittance in Sub-Saharan Africa, remittance flows to low and middle-income countries remained resilient in 2020, although it recorded a marginal decline than previously projected.

According to the report, remittance flows reached $540 billion in 2020, just 1.6 percent below the 2019 total of $548 billion. The decline in remittance across Sub-Saharan Africa was mainly attributed to a decline in remittance flow to Nigeria.

The report said there was a 27.7 percent decline in remittance flows to Nigeria, which alone accounted for over 40 percent of remittance flows to the region. Excluding Nigeria, the report said remittances to Sub-Saharan Africa increased by 2.3 percent, demonstrating resilience.

“Strong remittance growth was reported in Zambia (37 percent), Mozambique (16 percent), Kenya (nine percent) and Ghana (5 percent).” Remittance flows to the region were affected by “restricted mobility measures and the employment situation in the main host countries” resulting from the Covid-19 pandemic.

Overall, Nigeria ranked first in the remittance recipients in Sub-Saharan Africa in 2020, receiving $17.2 billion, followed by Ghana with $3.6 billion and Kenya with $3.1 billion.