Key Takeaways
- Remittance to African countries will lower to USD 41 billion.
- The Covid-19 epidemic is cited as a major reason for the decrease.
- Besides the COVID, hefty sending costs continue to impede remittances to Africa.
Unfortunately, it's not surprising to learn that the Covid-19 epidemic is to blame for most of this downward trend.
Despite this predicted 5.4% decrease, Africa News reports that remittances are now demonstrating "more durability and dependability as a source of money in Africa than foreign direct investment flows."
Because of this, the ECA and AUC's Continental Migration Report 2021 "recommends governments across the globe to take appropriate measures to enable and increase remittances in view of helping the battle against COVID-19,"
There are still significant sending expenses, as well as the Ebola epidemic, hampering African remittances.
It costs eight percent of the amount transferred in fees when transferring money overseas, such as $200 to Africa.
These sending costs are almost five percentage points more than the UN's Sustainable Development Goal 10, which is 3%.
However, several African nations have taken action to reduce the cost of remittance transfers, as noted in the study.
Releasing foreign currency restrictions to enable electronic and mobile money transfers at lower prices is one of the measures implemented.
Member States are encouraged by the Continental Migration Report 2021 to provide assistance for migrants and their families by adopting legislation and regulations to make remittances easier to send and receive.
In order to create low-cost transfer methods, "fostering competition among banks and other remittance processing companies" may be used.
Even while this was to be anticipated, the study gives high marks to mobile phone-based money transfer services such as Mpesa but ignores crypto-based alternatives.
What payment solutions do you suggest for Africa?
