|An illegal African immigrants being frisked after landing in Europe PHOTO: Courtesy|
BAfrican migrant workers in European Union countries and their families back home are set to save US$4 billion annually after remittance costs are reduced to 5 percent from the current 12.4 percent.
The benefit comes after G8 and the G20 established 5 percent as the target average remittance price to reach by 2014 which is set to benefit African migrants, who pay most to send money home than any other migrant group most.
World Bank in a press release said that in 2012 Africa's overseas workers sent close to US$60 billion in remittances in 2012 although the Sub Sahara region is the most expensive to send money to for migrants.
WB’s Send Money Africa database said the average cost of sending money to Africa is almost 12 percent- higher than global average of 8.96 percent, and almost double the cost of sending money to South Asia, which has the world's lowest prices at 6.54 percent.
The move is expected to increase remittance which will benefit millions of Africans.
“Remittances play a critical role in helping households address immediate needs and also invest in the future, so bringing down remittance prices will have a significant impact on poverty,” said Gaiv Tata, Director of the World Bank's Africa Region and Financial Inclusion and Infrastructure Global Practice.
Tata observes that this lower cost in remittances is set to advance financial inclusion by increased use of other financial services like opening accounts and borrowing loans since remittance are often the first financial service used by recipients.
WB said that banks which are often only channels available for African migrants are the most expensive remittance service providers and the reduced cost which will dome with a regulatory environment will encourage competition among other remittance service providers.
Under such an environment migrant workers, Africans included will benefit from more transparent information on remittance services.
Manuel Odeny © 2013