Leading digital money transfer service, WorldRemit has launched low-cost online money transfers from South Africa to Nigeria. An initiative which would not only unite two of Africa’s biggest economies but also enable Nigerians in South Africa to send money to all major banks in Nigeria at a low cost using its mobile app or website.
According to a World Bank report on remittance prices, South Africa is the most expensive G20 country to send money from. In its report for the first quarter of 2018, the World Bank said remitting from South Africa incurred an average cost of 17.13 percent.
Following the African Continental Free Trade Agreement (AfCFTA) signed in March 2018 in Kigali, Rwanda, it was recognised that one of the obstacles for businesses or individuals to carry out intra-African trade is the cost of charges to transfer money within Africa.
Remittances are very important. For many African countries, remittances account for a lump of its GDP. As important as it is, sending these remittances home can be burden for both senders and receivers as transaction costs for sending remittances to Africa are more expensive than any other region. For most of sub-Saharan Africa, these high costs are driven by a number of factors particularly low levels of financial inclusion and a lack of access to banking services.
WorldRemit has been making substantial efforts to promote financial inclusion using mobile money. Digitization will bring millions into the financial system where users can access mobile money platforms especially in countries where trust and penetration in traditional banking methods are low.
This recent effort will go a long way in encouraging trade and also help to drive financial inclusion in the two African countries.