WTO Public Forum: Africa still has highest transfer costs

Migrant remittances are larger than official development assistance (ODA) and foreign direct investment (FDI) combined, the Deputy Director-General of the International Organization for Migration (IOM), Ugochi Daniels, said in Geneva on Wednesday.

Speaking at a high-level panel organized by the Permanent Mission of Morocco to the UN-Geneva, as part of the World Trade Organization (WTO) Public Forum, Ms. Daniels recalled that the Global Migration Report, released earlier this year, reported an increase in remittance flows to $831 billion in 2022, compared to $128 billion in 2000. She stressed that migration and trade are intrinsically linked. This is evidenced by the recovery in post-pandemic trade flows, which has been largely dependent on migrant transfers. Hence the interest, she argued, in encouraging safe and regular migration routes that can accelerate the achievement of the Sustainable Development Goals (SDGs).

However, the IOM official noted that high transfer costs are affecting migrant remittances, noting that Africa remains the most expensive region in the world for remittances, with average costs of 7.9%. In this regard, Ms. Daniels estimated that achieving SDG 10.c (reducing the transaction costs of migrant remittances to below 3%) would result in additional savings of approximately $2.6 billion for migrants and their families each year.

The international official welcomed a downward trend in transfer costs, noting that they have fallen by 30% over the last decade, from 9% to 6%. “A glimmer of hope that should be celebrated!” Discussions during the panel, themed “Migrant Remittances, Inclusive Trade and Development”, focused on the factors behind the high cost of remittances, the digital divide, the non-digitalization of payments, low levels of inclusion, the lack of transparency and regulation in the sector and the margins applied to currency conversions.

The event, which coincides with the 30th anniversary of the Marrakesh Agreements establishing the WTO, was selected from a record number of more than 300 applications received for the 2024 Public Forum, one of the organization’s largest outreach events. It was an opportunity for the WTO, the United Nations Development and Migration System and international financial institutions to reflect on effective measures to strengthen cooperation to reduce the cost of remittances, which is a major challenge for the economies of developing and least developed countries.

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