While they must fall by 2030, the rates for sending remittances to sub-Saharan Africa are at a level deemed too high by international institutions. Why ?
Africa is still the most expensive destination for money transfers today, while the continent has the largest number of active mobile accounts. As every year, the World Bank took an interest in the costs of remittances around the world. The institution is based on sending a sum equivalent to 200 dollars and observes the fees and taxes applied according to the countries to which the sum is sent.
Africa has always been the most expensive destination. And particularly sub-Saharan Africa, where transfer fees amount to 8%, where they are only 4,6% of the sums sent to South Asia. While observers assured that the duopoly, exercised by Western Union and Moneygram - they represent 65% of the market -, was the cause of all the worries, the arrival of new players has not changed the situation.
South Sudan depends on remittances
These sums, which go into the pockets of operators, are a shortfall for certain countries whose economies depend on remittances from the diasporas. If, according to the World Bank and the IMF, the countries that benefit the most from financial transfers are Egypt, Nigeria, Morocco and Ghana, other states are totally dependent on the sums sent by their citizens from abroad. . This is the case of South Sudan, where a third of the GDP comes from these remittances. Remittances around the world are greater than the sum of foreign direct investment (FDI) and official development assistance.
The fact remains that the rate of charges applied by operators exasperates international institutions, from the World Bank to the African Development Bank, including the United Nations. The latter know that the impressive height of rates has caused the amounts of remittances to fall year after year.
Are the Sustainable Development Goals, desired by the United Nations, too optimistic? Eight years from the deadline set by the UN, the costs are still twice as high as the 3% target set for 2030. It makes you wonder if it is still possible to cut back on the current rate which is s' rise to 6,4% for the first quarter of 2021.
Dematerialization, the solution?
One of the solutions could be digitalization. "The crisis was thus the occasion for a significant acceleration of the deployment, already well under way, of the services of sending money dematerialized", summarize the economists Anda David, Maëlan Legoff and Luc Jacolin. In particular thanks to the arrival of recent players, such as RIA. "This dematerialization of transfers constitutes a real opportunity to get closer to the objectives of reducing costs", summarize the specialists.
A dematerialization which, moreover, would make it possible to put an end to the informal sector, or in any case to limit its scale in countries which see money circulating each year without being able to quantify it. "The fall in the cost of transfers via the dematerialization of services could promote the use of formal channels and financial inclusion in poor countries, with significant effects on development", state the three economists.
Still, the equation seems insoluble: operators would willingly lower their rates if the sums of transfers increased. Corn In 2020 alone, remittance flows benefiting countries in sub-Saharan Africa fell by more than 12%, blame it on the health crisis. Despite a tentative recovery in 2021, it is becoming increasingly difficult for diasporas to send funds to their countries of origin. There are only eight years left to hope for a 50% reduction in user fees. Today we are too far away.