Thu, Apr 17, 2014 - Page 15 News List

Africans losing US$1.8bn a year in fund transfer fees

AFP, LONDON

Africans are losing US$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 yesterday.

The Overseas Development Institute 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 percent on transfers of US$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 Overseas Development Institute director Kevin Watkins, the report’s co-author. “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.

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

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