The average cost of sending remittances to Africa dropped slightly from 8.2% in Q4, 2020 to 7.8% in Q4 2021, according to the latest data by Remittance Prices Worldwide (RPW).
Remittance Prices Worldwide (RPW) is a World Bank project that monitors remittance prices across all geographic regions of the world.
Launched in September 2008, RPW monitors the cost incurred by remitters when sending money along major remittance corridors. RPW is used as a reference for measuring progress towards global cost reduction objectives.
From their latest Q4 monitoring which was done in November 2021, it can be seen that Africans continue to spend a greater proportion of their remittances when making transactions. Meanwhile, the global average in Q4 2021 was 6.04% a decrease from 6.30% in Q3, 2021, according to the report.
The report attributes the decrease to digital providers offering more services in line with their growing market share over the last few years.
Moreover, the global average has remained below 7% which was reported in 2019. However, 6.0% is still some ways from reaching G20 target of 5%, and the SDG (Sustainable Development Goals) target of 3%.
Here are some of the key findings from the report:
The Global Average decreased from 6.3% in Q3, 2021 to 6.04% in Q4 2021
South Asia remains the lowest cost receiving region with an average cost of 4.30%
Sub-Saharan Africa remains the most expensive region to send money to, recorded at 7.83% total average cost in Q4 2021
Banks remain the most expensive types of service provider with an average cost of 10.44%
In Q4, 2021, mobile money remains the least costly instrument to originate remittances and was also the least cost instrument to receive remittances
The report also established that it costs almost half to send remittances through digital services, compared to cash, with digital means costing 5.82% of the total remittance value compared to 8.79% when cash is sent directly.