Nasser Bourita: Africa Has the World’s Highest Remittance Transfer Fees

Rabat – The cost of transferring remittance in Africa is the highest in the world, and addressing this issue is of “critical” importance to African economies, Morocco’s Foreign Affairs Minister Nasser Bourita said on Thursday.

Facilitating and reducing fees of remittance transfers for the African diaspora is “fundamental” given the important role that remittances play in the continent’s economy, Bourita explained while delivering an opening statement at the Rabat Forum on Reduction of Remittance Costs for African Diaspora on Thursday.

In his opening remarks, Bourita highlighted the need to support the African diaspora and facilitate the process of transferring funds for them. “Before we ask what the African diaspora can do for Africa, we need to ask what can Africa do for its diaspora.”

“Remittances transfer of the African diaspora are the most expensive in the world, averaging 8% while it averages 6% in other regions,” Bourita said, adding that “for each $200 a member of the African diaspora transfer, Africa pays $16, while Asia pays less than $10.”

The high cost of remittance falls short of the United Nation’s ambitions; the current cost is a far cry from the 3% which the UN declared is its 10th objective for Sustainable Development by 2030, he added.

Noting the importance of remittances for the Moroccan and African economies, Bourita said that: “It’s likely the inflow of remittances into Africa is larger than that of Foreign Direct Investments (FDIs), and it is a reliable and resilient source of foreign currency.” Remittances are also of critical importance to Morocco’s macroeconomic stability, the minister said.

The Rabat Forum on Reduction of Remittance Costs for African Diaspora

The diplomat also pointed out that during the pandemic, remittances played an important role in cushioning social security, as they offered a reliable source of income.

While delivering his opening remarks, he further expressed his hope that through the Rabat forum, African nations would be able to implement and exchange tangible policies to facilitate the transfer of remittances for the African diaspora.

“We all hope that the Rabat Forum marks a transition toward political rhetoric and diplomatic meetings towards a more pragmatic approach.” In the dialogue, he talked about migration as he stated: “African migration is neither a problem for Africa nor for the world; it is rather an opportunity for Africa and its partners.”

Bourita called on participants to adopt a pragmatic approach in deliberating possible solutions to reduce the high cost of transferring remittances.

The Rabat Forum on Reduction of Remittance Costs for African Diaspora

Also speaking at the event was Morocco’s Central Bank Governor, Abdellatif Jouahri who highlighted the social and economic importance of remittances destined for Africa.

“Remittances are of vital importance as they provide a source of the livelihood of many families.” In Morocco, the 37% “historic” increase in the volume of remittances shored the country’s post-pandemic economic rebound in 2021, Jouahri explained.

As they provide an important source of foreign currency, remittances helped cover one-third of Morocco’s budget deficit in 2021 and represented 20% of funds collected by Moroccan banks.

Jouahri further added that on the continental level, the volume of remittances represented 2.5 times the values of Foreign Direct Investments (FDI).