FTInsight April/May 2016

international migrants will send $601 billion to their families in their
home countries this year, with developing countries receiving $441
billion, says the Migration and Remittances.
Factbook 2016
Currently, no uniform and authoritative historical data on
informal f lows exist. Given the widespread use of informal
remittance channels, the data should be regarded as
underestimates of total f lows.
The United States was the largest remittance source country, with an estimated $56 billion in
outward flows in 2014, followed by Saudi Arabia ($37 billion), and Russia ($33 billion). India
was the largest remittance receiving country, with an estimated $72 billion in 2015, followed
by China ($64 billion), and the Philippines ($30 billion).
The top destination countries
for Sierra Leonean emigrants are
Guinea, the United States, the United
Kingdom, Liberia, Senegal, Germany,
the Netherlands, Australia, Nigeria,
Canada.
The African Institute for Remittances was
launched on 28th November, 2014 to
build the capacity of the Member States
of the African Union, remittance senders
and recipients and other stakeholders
to develop and implement concrete
strategies and operational instruments
to use remittances as development tools
for poverty reduction.
Remittances to sub-Saharan
Africa cost the most. Sub-
Saharan Africa also has the
least eff icient retail payment
systems and regulation that
creates high barriers to entry.
Globally, sending remittances costs an average of 7.37
percent of the amount sent. This figure is used to monitor
the progress of the global effort for reduction of remittance
prices.
South Africa remains the most costly G20 country
to send remittances from, and this is despite a
decline of about 5 percentage points in the last
two years, when the cost of sending from South
Africa was in excess of 20 percent. The cost of
sending from the second most expensive G20
sending country – Japan – was recorded at 11.95
percent, falling below 12 percent for the first
time in the history of RPW. Russia remains the
least expensive G20 sending country, followed by
Saudi Arabia (5.05 percent). Korea (5.54 percent)
and the USA (5.93 percent).
Location, Location, Location! Remittance
costs vary widely between different service
providers. Commercial banks, at 13 percent,
remain the most expensive option for
sending money unless they have dedicated
remittance services. At 7 percent, specialised
money transfer operators are the cheapest
option.
FT
Insight
5
If the cost of sending remittances could be reduced by 5 percentage points, remittance
recipients could receive over $16 billion more each year.
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