Sending money to TZ from UK most costly in E. Africa: report

Dar es Salaam.  Sending money to Tanzania is the most expensive in the Eastern and Southern Africa, a London based consultancy organisation, Developing Markets Associates (DMA) June global report shows.

According to new analysis which was presented by Mobile 360 conference in the city, the average cost of sending £120 from the UK to Tanzania is 14 per cent, the highest average cost in the region.

This is when contrasted to other countries in the region like Ethiopia (13 per cent), Zambia (13 per cent), Rwanda (13 per cent), Mozambique (12 per cent), Uganda (9 per cent), and Kenya and Zimbabwe with seven per cent rate have the lowest cost.

The event, hosted by GSMA, who represent 800 mobile network operators across the world, was set to show evidence as to why Tanzania has the highest cost of sending money from the Diaspora.

“More than £44 million is sent each year by more than 38,500 Tanzanians living in the UK. But the cost of sending money is twice as much as sending to neighbouring Kenya or Zimbabwe,” reads part of the report.

The analysis shows that the average cost of sending money to Africa is almost 10 per cent, compared to the global average of just over seven per cent. Yet the UN Sustainable Development Goals say that by 2030 the global average price for remittances should not exceed three per cent of face value, with even the most expensive countries not being more than five per cent.

The report urges international development donors to support a pilot project to enable UK based remittance service providers to access Southern Africa through Sadc’s integrated regional electronic settlement system, through which 95 banks serve 11 countries.

Mr Leon Isaacs, CEO of DMA, was quoted as saying that: “Sending money home is very expensive compared to the relatively low incomes of migrant workers and the small amounts they typically send.

“The real challenges contributing to higher costs of sending money from the UK to Africa are not fixable by new technologies alone. Instead, we need to be focusing on scaling existing technology, creating the regulatory environments for those technologies and on changing consumer behaviour to send money digitally from ‘end-to-end,” he argued.

“It’s more expensive to send money to Africa than elsewhere. But it doesn’t have to be like that. The way we stay in touch, do our shopping, and even find love, have all gone digital. Yet, for the vast majority of people sending money home, they are still doing it the way they have always done it: in cash,” said Juliet Munro, director of Inclusive Finance in a quoted statement at FSD Africa.