The World Bank has ranked Kenya as the cheapest country in Africa from which to remit money abroad, with transaction costs averaging 9.2 percent of the value of the transfer compared to 11.89 percent in other countries across the continent.
Kenya ranked top in the “Send Money Africa” report due to its more established mobile money systems. According to the report, other African countries have limited channels for remittances and the alternatives are more expensive, thereby doubling the costs.
Remittance prices are even higher when sending between African nations. South Africa, Tanzania and Ghana are the most expensive, with prices averaging 20.7 percent, 19.7 percent and 19 percent respectively, due to factors including limited competition in the market for cross-border payments.
“Send Money Africa also finds that banks, which are the most expensive remittance service providers, are often the only channel available to African migrants,” stated the report.
The global average cost of sending money was 8.96 percent of the amount being transferred.
The report further recommended that governments should implement policies to open the remittances market up to competition, which may save US$4 billion per annum on remittance fees.