Market barriers to remittances in sub-Saharan Africa (SSA) - Volume 2
This note is the second in a series of seven notes that explore the supply-side barriers to remittances in sub-Saharan Africa (SSA). Currently, the average cost of remittances to SSA is 9.4% of the value of the transaction, compared to the global average of 7.1%. Informal flows are rife, especially in SSA, and the trend is increasing in many corridors. The relatively low formal penetration compared to informal flows coupled with the high cost of remittances are indicative of a formal market that is not functioning optimally to serve people’s needs. To reduce the cost to between 3% and 5% of the transaction value as agreed by the G20 and Sustainable Development Goals without compromising the access of consumers in hard-to-reach areas, there needs to be an understanding of the current market impediments that are preventing formal costs from decreasing.