Cross-border remittancesNovember 18, 2016 •
The World Bank estimated that in 2016 remittances from migrant workers to developing countries will be worth USD 440 billion. More than twice that of foreign aid. Remittances play a critical role in supporting the welfare of many individuals and households in developing countries. Moreover, remittances can contribute to economic growth, with research indicating that it can have a greater impact than ODA and FDI. However, many developing countries struggle to leverage these remittances.
One of the major impediments is the cost and ease of sending remittances. Nowhere is this more evident than in the remittance corridors between South Africa and the rest of the Southern African Development Community (SADC), which have been amongst the most expensive in the world. Furthermore, due to identification requirements and distribution challenges, many adults rely on informal channels.
This 2016 report provides an update on the available money transfer offerings that facilitate remittance flows from South Africa to other countries in SADC, specifically focusing on comparative instrument costs, access requirements, and the customer experience. This is compared to informal remittance channels. Four corridors were selected as a focus for the research, namely: the Democratic Republic of the Congo (DRC), Lesotho, Mozambique, and Zimbabwe.