Duncan Green writing for Oxfam’s From Poverty to Power blog:
‘Remittances to Africa are rising. In 2013, transfers to the region were valued at $32 billion, or around 2% of GDP. Charges on remittances to Africa are well above global average levels. Migrants sending $200 home can expect to pay 12% in charges, which is almost double the global average (see graph). While the governments of the G8 and the G20 have pledged to reduce charges to 5%, there is no evidence of any decline in the fees incurred by Africa’s diaspora.
I really don’t think there’s any incentive for Western-owned remittance operators to lower their costs. The only way to break the duopoly is to do the hard work of building our own systems. I say that as the cofounder of Remit.ug and as a regular sender of remittances. Begging Western governments isn’t going to change things. Demanding that our own governments break up the exclusivity agreements between banks and MTOs would be the first step forward. The second step would be to create an enabling environment that would allow local competition to enter the fray. Anything less is a detriment to economic development and a sure sign that our priorities are misplaced.