Africans pay some of the highest charges in the world for interational money transfers

Adili

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Nov 3, 2007
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Charges in sub-Saharan Africa average 12% on transfers of $200, almost double the global average, according to the report. (Flickr)
Africans are losing $1.8-billion a year due to high fees levied on funds sent from abroad by relatives, Britain's leading think tank on development said Wednesday.

The Overseas Development Institute (ODI) found that Africans face some of the highest charges in the world for international transfers, but global leader Western Union insisted that the fees were down to a range of local factors.

The report, issued in partnership with the Comic Relief charity, claims that reducing African charges to the global average would generate enough revenue "to put some 14-million children into school, almost half of the out-of-school total in the region, and provide safe water to 21-million people".

Charges in sub-Saharan Africa average 12% on transfers of $200, almost double the global average, according to the report.

"This remittance super tax is diverting resources that families need to invest in education, health and a better future," said Kevin Watkins, the report's co-author and ODI Director.

"Africans living abroad make huge sacrifices to support their families, yet face charges which are indefensible in an age of mobile banking and internet transfers."

Western Union argued that it had "delivered much-needed services to individuals looking for fast, convenient and reliable ways to send money to family and friends" during its 20 years of operating in Africa.

"Our pricing varies between countries depending on a number of factors such as consumer protection costs, local remittance taxes, market distribution, regulatory structure, volume, currency volatility, and other market efficiencies," it added.

"These factors can impact the fees and foreign exchange rates offered by corridor and service type."

The report argued the high fees were due to lack of competition, pointing out that Western Union and MoneyGram control almost two-thirds of the remittance market in Africa.

It estimated that the two companies and their associated banking partners in Africa account for around a third of the $1.8-billion loss associated with high remittance charges each year.



Source:Guardian
 
shocking and disappointing news, its true that Moneygram and Western Union are the only Giant money transfer companies from all corners of the world to Africa. I lived in Europen once upon time in my life, I used western union money transfer to send money home, but the remittance fees used to be too high and exchange rate used to favor them always.

Things has changed now, Western Union is cheaper and even more convinient, I am not sure when this report was published. It cant be up to 12% on tranfer of $200. More research is needed to investigate this method of sucking African effort and sacrifices
 
Sadly, those are the facts.

Moneygram seems to charge less than Western Union although at a relatively an unpleasant exchange rate. Look at this snapshot, which compares the costs of sending $500 from US to Tanzania using the two giants.

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