New estimates show that in 2015/2016 a total of £4.1bn ($6.4bn) was sent in the form of remittances from the UK to Africa. Sending money home is particularly expensive in relation to the small sums which are typically sent.
According to a recent report by Financial Sector Deepening Africa, Tanzania is the most expensive destination in Africa to send remittance from United Kingdom while Kenya has the lowest cost. The cost of sending money from UK to Kenya on average is 7 per cent of face value, Uganda 9.0 per cent and Tanzania 14 per cent.
On average, the cost of sending money from the UK to Africa varies between 11.0 per cent for ‘cash-to-cash’ transfers, 8.0 per cent for online services and 6 per cent for those terminating into a mobile wallet 3.0 per cent.
Most people still transfer money from the UK to Africa using traditional methods despite the developments in technology which enhance digital remittances.
“If these senders shopped around, and switched to use the digital services available in the market, then over a 100 million pounds a year could be saved in total fees.” according to the report.
About 38,691 people sent 44 million pounds to Tanzania from UK in 2015, in Kenya 151,073 people sent 334 million pounds, and in Uganda 65,447 people remitted 181 million pounds.
Other expensive countries to send money to from the UK to Africa include Eritrea, Rwanda, Zambia, Ethiopia, South Sudan and Gambia. In each of these the average cost is more than 10 percent of the total amount.
Nigeria is the largest receiver of remittances in Africa, accounting for nearly two-thirds of remittances sent from the UK to Africa.
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