Remittances in Africa: A Catalogue of Studies and Technical Assistance by the World Bank, Development Agencies and Government in Africa
This paper provides a review of trends in financial markets and infrastructure that influence remittance costs in Africa. It also examines the impact of new technology on remittances, the legal and regulatory framework governing remittance flows, and the impact of remittances on households and national policy.The paper states that migrant remittances have become a major source of financing for developing countries and are particularly important in Sub-Saharan Africa. The increasing role of remittances has spurred an interest in development practitioners who wish to understand the nature, potential development impact, and policy implications of remittance flows. Main findings from the review include:
- Remittance market in Africa is largely undeveloped;
- Cost of remittances to Sub-Saharan African countries is high, which makes regulated remittance channels unattractive to remittance senders;
- Estimates suggest that 45-65% of remittances in Sub Saharan Africa are transferred through unregulated channels;
- Regulatory framework in many African countries is a hindrance non-bank financial institutions, which leads to a lack of competition among remittance service providers and increases costs for remittance senders;
- Key objective of various stakeholders is to reduce the cost of remittances through improvements in the payments systems infrastructure and the regulatory framework.