Exploring barriers to remittances in sub-Saharan Africa

Exploring barriers to remittances in sub-Saharan Africa

June 21, 2018    

On average, the remittance market in Africa is the most expensive in the world. The latest data from the World Bank indicates that the average cost of remittances to sub-Saharan Africa (SSA) is 9.4% of the value of the transaction, compared to the global average of 7.1%.

Sending and receiving funds in the region is costly in terms of price for the consumer and in terms of the cost to access remittance service points. The rural population often needs to travel long distances or spend an entire day in a queue to pick up over-the-counter remittances.

This has left a gap in the market for remittances for an increasingly sophisticated informal market.

Current market impediments that prevent formal costs from decreasing need to be understood. The cost of the transaction value should be reduced to between 3% and 5% as agreed by the G20 and Sustainable Development Goals, without compromising the access of consumers in hard-to-reach areas.

This note is the second in a series of seven notes that explore supply-side barriers to remittances in SSA. It draws from existing literature and in-depth stakeholder interviews to outline and rank the market barriers to the efficient flow of remittances in SSA. This includes:

  • The preference for consumers to store value digitally
  • Disproportionate know-your-customer (KYC) requirements
  • Limited competition
  • Lack of regulatory coordination across borders
  • Outdated legacy systems that are unable to reap the rewards of new technology

This note will form part of the basis for Cenfri and FSD Africa’s panel session on “Market barriers to domestic and cross-border payments” presentation at the 25th edition of the SWIFT African Regional Conference, which will take place in Kigali, Rwanda, from 20 to 22 June 2018.


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It is part of a seven-part series marks the start by identifying the most prominent corridors within and into SSA in terms of volume, cost and importance for the economy. It also investigates the relationship between remittance flows and migration patterns, used as a proxy to identify pain points in specific corridors. This report is aimed at remittance stakeholders, policymakers and anyone who is interested in understanding the remittance market in SSA in more detail.


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Vol. 2 investigates barriers based on deep dives in four different countries in SSA providing the overarching barriers to understand a highly complex value chain. Vol. 3 – 6 provides case studies of the four countries against the backdrop of their unique country context. Vol. 7 concludes with recommendations on necessary policy actions and multi-country approaches for remittance players.


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Vol. 3 explores the state of the remittance sector in Uganda and unpacks the key challenges and best practices within the industry.


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Vol. 4 explores the state of the remittance sector in Ethiopia.  

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Vol. 5 explores the state of the remittance sector in Côte d’Ivoire.

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Vol. 6 explores the state of the remittance sector in Nigeria.

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Download the Infographic on the cost of sending remittances from the UK to Commonwealth Countries in Africa

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