The African diaspora are expected to send $32 billion back home this year, but pay a yearly supertax estimated at nearly $2 billion for the privilege, the highest in the world. Why does it cost so much?
A reduction in charges could make a larger proportion of cash available for development use the theory goes, although this is doubtful as remittances are largely used to fund every day expenses such as school fees, healthcare and other living expenses.
According to Western Union as reported in the Financial Times, pricing tends to vary between countries and depends on a number of factors such as “consumer protection costs, local remittance taxes, market distribution, regulatory structure, volume, currency volatility, and other market efficiencies”
Image credit: Cash out money transfer, CC BY SA