Sending money to other countries has never been an easy task as there’s a lot of red tape to get through – along with stringent regulations and high costs according to Rand Merchant Bank (RMB), a division of FirstRand Bank limited.
Consequently, African market is seen as an expensive one for remittances as costs are higher than the global average.
The average cost of remitting US$200 in South Africa is 14.6 percent – the highest in the world. The exorbitance is attributable to the prevalence of transacting in cash within the context of poor infrastructure and a lack of local competitors.
“There is, therefore, significant scope for mobile money solution as well as the right technology to innovate in this regard”, RMB Africa Research team said.
WorldRemit, one of the leading international money transfer service, recently, launched in New York, connecting the state’s 42,000-strong Nigerian diaspora to its fast, low cost service.
The United States is the world’s biggest sender of remittance, and the amount of money sent has grown from $50 billion to $66 billion over the past five years, according to the World Bank.
In its 2018 edition of “Where To Invest in Africa”, the team plot the investment potential of African economies using RMB’s investment attractiveness rankings, which balance economic activity against the relative ease of doing business.
“Our workings are complemented by an array of highly regarded global surveys, RMB’s growing presence on the continent, as well as client feedback on their day-day business dealings across Africa”, the team said.
RMB’s Investment Attractiveness Index provides a means by which to assess the most appealing of African investment destinations. The index does this by overlaying macroeconomic fundamentals with the pragmatics of doing business on the continent.
“We believe that the decision to invest is typically based on two key considerations: economic activity (specifically market size and growth) and the business environment”, the RMB Africa research team stated in the report.