- LIVE TV
Kenya is seeking to cut the charges on sending money home from foreign countries to less than three per cent of the amount transacted.
Currently, the average cost from the UK, for example, is 6.6 per cent of the amount.
The move is part of an initiative called Nairobi Action Plan on Remittances, spearheaded by the Ministry of Foreign Affairs and Trade to implement UN’s sustainable development goal that calls on countries to cut the cost of sending remittances to three per cent of the amount sent by 2020.
The plan will be implemented by the newly established African Institute of Remittances (AIR), hosted by Foreign Affairs ministry.
AIR’s interim director Amadou Cisse said the average cost of sending money to Africa was significantly higher compared to the global average and the rates were even bigger between African countries.
“In Africa we have an average of 8.8 per cent compared with 1.1 per cent global rate which is significantly high, and the worst are South Africa and Nigeria at 20 per cent,” he said.
The World Bank monitoring of Remittance Prices Worldwide (RPW) confirms that costs are higher for African corridors, with the worst cases being for intra-Africa remittances.
Countries have been lobbying for remittance tax reliefs, transboundary financing schemes and capping the remittance costs.
The Nairobi forum called for increased investments in technology and mobile money transfers and increased competition to drive down costs.
Kenya is keen on increasing the amount of money sent from abroad given the diaspora remittances alone accounted for over three per cent of Kenya’s GDP in 2015 from the global diaspora population estimated at about three million.
Last month, diaspora remittances hit a record Sh15.6 billion up from Sh14.6 billion in May. However there was a notable 6.3 per cent reduction in inflows from Europe in the wake of the British vote to leave the European Union.
Director of Diaspora and Consular Affairs Washington Oloo said Kenya was confident that remittances from Europe would bounce back once the shock and uncertainties pass.
– Business Daily