Remittances to Africa are expected to rise by 3.2% to about $33 billion in 2014 according to the World Bank. Africa’s largest economy, Nigeria is the largest recipient in sub Saharan Africa accounting for about $22.3 billion in remittances received in 2014.
The average cost of remittances fell to about 7.9% of the value sent compared to 8.9% the year prior. However, overall, the cost of sending remittances to the region remains prohibitively high with prices reaching up to as high as 18 to 22 percent in some countries.
To be precise, the price of remitting to Sub-Saharan Africa remains above global levels, a double-digit 11.3% for sending the equivalent of USD 200, versus the global average of 7.9 percent. Nine out of the 10 most expensive corridors in the world are to countries in the region, with prices ranging from 18 percent to 22 percent.
Remittances are a highly important source of external capital flows to the continent and official figures show them to be the largest international flow of financial resources to the continent. According to the Overseas Development Institute (ODI), “reducing remittance charges to global average levels would generate $1.8 billion, enough to put 14 million children through primary school, or provide clean water to 21 million people. Transaction fees cost the region an estimated $1.8 billion annually.”