According to the latest World Bank Migration and Development Brief dated May 2022, aggregate regional remittance costs averaged 7.8% between October and December last year.

The average cost of remitting $200 from countries in the least expensive corridors amounted to 3.4% while costs for the most expensive corridors registered 31.5% during the same period, an increase of 12.3% from the year earlier.

The report titled “A war in Pandemic: Implications of the Ukraine Crisis and Covid-19 on Global Governance of Migration and Remittance Flows,” notes that though intraregional migrants in Africa comprise more than 70% of all international migration, remittance costs are high due to the small quantities of formal flows and use of black-market exchange rates.

The fee for sending $200 in remittances from Tanzania to neighbouring Uganda, for example, would cost 29.7% of the transaction amount.

The report, however, shows the continent recorded strong growth in remittances in 2021, largely as a result of a firm pace of economic activity in Europe and the United States, although facing rising headwinds from inflation tied to distortions in supply chains and surging commodity prices.

In 2020, remittances to the region fell by 8% due to the Covid-19 pandemic. “As Covid-19 incidence eased in the industrial economies, job prospects improved, allowing African migrants to supplement remittances to home countries that continued to experience sobering consequences of the virus,” says the report.

The surge in flows to Nigeria by 11.2% to $19.2 billion in 2021 accounted for nearly one-third of the overall $6.3 billion increase in remittances to Africa.

Nigeria dominates the region in remittance receipts, having historically accounted for a half of sub-Sahara Africa inflows followed by Ghana.

South Sudan and the Democratic Republic of Congo also saw upturns in flows in the period.

Kenya benefitted from a 20% growth in remittance receipts, with continued momentum in the first quarter of 2022 nearing 25%.

Tanzania’s receipts grew by 60% and the Gambia enjoyed a 30% growth in remittances grounded in a new government and new currency.

The report notes that there is uncertainty for remittances to Africa for 2022–23 and risks in the outlook are exceptionally high against the background of global conditions affected by the Russian invasion of Ukraine.

--TheCitizen--