Research: Lost in intermediation: how excessive charges undermine the benefits of remittances for Africa
ODI
Kevin Watkins and Maria Quattri
16 April 2014
[Excerpt from Summary]
Africans living abroad face some of the highest fees in the world to send money home, costing their families approximately $1.8 billion a year in lost income. This report, funded by Comic Relief and Unbound Philanthropy, analyses global charges on money sent to sub-Saharan Africa, and estimates that reducing charges to global average levels would generate enough income to put 14 million children into school and provide safe water to 21 million people…

…This is because workers are paying an average of 12% in fees to transfer money back to relatives in sub-Saharan Africa. To put that in context, a worker sending $200 home to provide for a relative’s education would incur a $25 fee.

The global community pledged to cut remittance charges to 5% by 2014, yet this ‘super tax’ shows there is a long way to go.

Our report urges governments to increase competition in money transfer remittances and to establish greater transparency on how fees are set by all market operators.
Full Report: http://www.odi.org.uk/sites/odi.org.uk/files/odi-assets/publications-opinion-files/8901.pdf