By Hilary Mare
THE remittance corridor connecting Angola to Namibia remained the costliest in 2016 and 2017 at 26.7 percent and 21.4 percent, respectively, World Bank’s latest Migration and Development Brief reveals.
The brief also affirms that in Sub-Saharan Africa, remittance services remain the costliest in the world, at 29 percent above the world average in 2017.
In the first quarter of 2018 however, the average cost of remittance services in Sub-Saharan Africa declined compared with a year earlier, from 9.8 to 9.4 percent.
“The cheapest intra-regional corridor in 2017 was Côte d’Ivoire to Mali, at 2.9 percent. This suggests that achieving the SDG target (10.c) of lowering remittance costs by 3 percent by 2030 is a possibility for the rest of the region’s corridors, but significant efforts are needed to bring the costs down,” explains the Brief.
The value for Personal remittances, received in Namibia was USUS$10,192,860 as of 2014. Over years, the World Bank also reports that it has reached a high of USUS$17,561,580 in 2005 and a low of USUS$7,959,586 in 2002.
Remittances to Sub-Saharan Africa accelerated 11.4 percent to US$38 billion in 2017, supported by improving economic growth in advanced economies and higher oil prices benefiting regional economies.
The largest remittance recipients were Nigeria (US$21.9 billion), Senegal (US$2.2 billion), and Ghana (US$2.2 billion). The region is host to several countries where remittances are a significant share of gross domestic product, including Liberia (27 percent), The Gambia (21 percent), and Comoros (21 percent). In 2018, remittances to the region are expected to grow 7 percent to US$41 billion.
“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues,” said Dilip Ratha, lead author of the Brief.
Remittances are expected to continue to increase in 2018, by 4.1 percent to reach US$485 billion. Global remittances are expected to grow 4.6 percent to US$642 billion in 2018.
The global average cost of sending US$200 was 7.1 percent in the first quarter of 2018, more than twice as high as the Sustainable Development Goal target of 3 percent. Sub-Saharan Africa remains the most expensive place to send money to, where the average cost is 9.4 percent. Major barriers to reducing remittance costs are de-risking by banks and exclusive partnerships between national post office systems and money transfer operators. These factors constrain the introduction of more efficient technologies – such as internet and smartphone apps and the use of cryptocurrency and blockchain – in remittance services.
In a special feature, the Brief notes that transit migrants – who only stay temporarily in a transit country – are usually not able to send money home. Migration may help them escape poverty or persecution, but many also become vulnerable to exploitation by human smugglers during the transit. Host communities in the transit countries may find their own poor population competing with the new-comers for low-skill jobs.
“The World Bank Group is mobilizing financial resources and knowledge on migration to support migrants and countries with the aim of reducing poverty and sharing prosperity. Our focus is on addressing the fundamental drivers of migration and supporting the migration-related Sustainable Development Goals and the Global Compact on Migration,” said Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank.
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