The remittance industry in Africa is a vital part of the continent's economy, with billions of dollars flowing into the continent each year. According to the World Bank, remittances to sub-Saharan Africa reached $47 billion in 2019, representing a significant increase from previous years.
One of the key drivers of this growth is the increasing use of digital technologies in the remittance industry. Mobile money platforms, such as M-Pesa in Kenya and EcoCash in Zimbabwe, have made it easier for people to send and receive money across borders, increasing the accessibility and efficiency of remittances in Africa.
However, the African remittance market is still plagued by high fees and lack of transparency. According to a report by Boston Consulting Group, the average cost of sending $200 from the United States to Africa is around 9.4%, which is higher than the global average of 7.1%.
To address these issues, several remittances startups and fintech companies have emerged in Africa, aiming to offer more affordable and transparent services. Some examples include Chipper Cash, a pan-African mobile money platform, and BitPesa, a blockchain-based remittance company that allows users to send money from Europe to Africa at a low cost.
Moreover, the African government and international organizations are working on creating regulations and policies that will make the remittance market more efficient and affordable. The African Union and the Economic Commission for Africa have launched a continent-wide initiative to reduce the cost of remittances in Africa.
Overall, the remittance industry in Africa is at a pivotal point, with the potential to significantly boost economic development and financial inclusion on the continent. However, more needs to be done to address the challenges of high fees and lack of transparency, and support the growth of innovative startups and fintech companies in the remittance space.