In the last few years, African countries have witnessed a rise in remittance inflows as there has been widespread migration from Africa. According to data from the United Nations, eight out of the ten fastest-growing migrant populations are from sub-Saharan African nations. These expatriate communities are now playing a key role in building African economies.
Positive economic outlook
Recent research from the Institute of Chartered Accountants in England and Wales (ICAEW) reveals that Nigeria is one of the biggest recipients of remittance in Africa, closely followed by Egypt. Nigeria received $22 billion (or 29%) as total remittances in 2017, predominantly from the Gulf, the United States and the United Kingdom.
The report says that East Africa, with a GDP forecast of 6.3%, will remain the continent’s best-performing region, while the economic outlook is said to be positive for West and Central Africa, Franc Zone, Northern Africa and Southern Africa.
According to the World Bank’s Migration and Remittances report issued in April 2018, remittances to sub-Saharan Africa grew from $34 billion in 2016 to $38 billion in 2017, and continued growth is expected for 2018 and 2019. However, high transfer costs are the downside of remittance inflows, since it is more expensive to send money to sub-Saharan Africa than anywhere else in the world. In Q1 2018, the World Bank reported an average cost of 9.44% across the region.
There is also a high level of financial exclusion in Africa as international money transfers tend be controlled by a handful of financial institutions. What options are available for better money transfer services, ease in transmission and value for money, as remittance inflows to Africa and between African countries, are on the rise?
Building cost-effective remittances
International Money Transfer Organisations (IMTOs) can help reduce costs while increasing accessibility, security and versatility. For example, Xpress Money is partnering with financial institutions across Africa and providing customers with more choice. It is working with a wide range of banks, telcos and non-banking financial companies (NBFCs) and has more than 8150 agent locations to make it simple and economical to transfer funds. This network is expected to increase upto 10,000 by 2019.
Among Xpress Money’s partners are leading financial players such as Cooperative Bank of Kenya, DFCU Bank in Uganda, I&M Bank in Rwanda, ADB Bank in Ghana, FBN in Senegal, Real Transfer in Namibia, Commercial Bank of Ethiopia, Diamond Trust Bank and Kenya Commercial Bank.
Because Africa is one of the early adopters of digital remittances, Xpress Money is extending mobile money transfer services across the continent. The IMTO has services including Cash to Cash and Account Credits, so that its customers have a range of services to choose from. Instant, affordable, and secure are few more reasons why the African diaspora prefer to use money transfer services by the company. Whether you choose to receive money in cash, into an account or on your mobile wallet, Xpress Money provides a wealth of choice for the banked and the unbanked. Throughout Africa, it is creating an infrastructure that ensures that more money will flow cost-effectively across borders and support local economies.
This post first appeared on the Xpress Money blog.