From Morocco, African states call for cheaper remittance transfer costs

From Morocco, African states call for cheaper remittance transfer costs

African diaspora is in need of urgent action to reduce the cost of remittances, an instrumental source of investment and a key factor in reducing poverty in the continent, said participants at an African meeting in Rabat.

There are some 150 million Africans living outside the continent with remittances estimated at 100 billion dollars in 2021 alone but the cost of transferring 200 dollars to the continent could cost 16 dollars on average, deplored Morocco’s foreign minister Nasser Bourita who was speaking at the event.

The cost of remittances is estimated at 8% for Africans. This “is very expensive and not consistent with the UN goals as expressed in the 10 sustainable development goals which target 3% by 2030,” he said

The higher cost of remittances could negatively impact African economies and encourage the informal sector, he said.

Speaking at the same event, Moroccan central bank governor highlighted the centrality of remittances for the Moroccan economy and the resilience of transfers during the pandemic.

Remittances by Moroccans abroad rose 37% in 2021 and 13% in 2022 to represent 8% of Morocco’s GDP, he said.

These transfers represented 20% of deposits in Moroccan banks whose subsidiaries in Europe are facing a backlash that should be met with diplomatic action, said Jouahri.

In this respect, Jouahri warned of looming legislation by EU institutions to ban branches of foreign banks from carrying out direct operations in their home countries from European territory.

Such a measure would hamper the operations of Moroccan banks serving the Moroccan diaspora in Europe in full compliance with European legislation and full transparency, said Jouahri.

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