Business News of Thursday, 21 December 2017
The high costs of sending money home mean the Ghanaian diaspora are losing out on up to 15.40 percent when sending money home.
Each year $2.1b is sent into Ghana in remittances and the final week before Christmas is one of the busiest times to send money. The World Bank reports that the average cost of sending money is around 7.21% with sub-Saharan Africa being one of the most expensive regions to send money to at 9.13%.
WorldRemit research revealed that switching to lower cost channels could mean thousands of Ghanaians could receive an extra Christmas present this year. The savings were highest when sending from Australia to Ghana with a saving of US$30 (GHS 135) when sending $200 (around GHS 880) – enough to buy around 6 metres of traditional print fabric.
With hourly wages in Australia ranging from earning between US$15-25 on average, these high costs mean the diaspora are having to work almost an extra hour to cover the elevated cost of sending money home through high cost channels this Christmas. The impact of the savings could be even more significant to those back home where the saving of US$30.8 could be enough to buy 6 metres of traditional fabric.
Ismail Ahmed, CEO of WorldRemit noted that “It’s important to consider that the cost of sending money goes far beyond the transactional cost. Traditional methods mean travelling to an agent to pay in money, taking time off work to do so knowing your family and friends receiving the money will have to do the same”.
He added, “by sending money from one mobile to another instantly, we can save people not just money, but also time”.
It costs around $9 (GHS 39.6) for a return trip to travel from Volu to pick up cash in Ho, taking about 2 hours to go there and back. Even those living within Accra can take up to 1 hour to travel to an agent and back, costing up to $4 (GHS 18.09) return trip.
WorldRemit data suggests that most of their customers send between three to four transfers a month so the savings across the month of December could be even greater. The savings on travel and time to pick-up money alone could be enough to buy a customised throw pillow.
Ismail Ahmed said, “we see that being able to send money more frequently without paying high costs and wasting time brings families and friends closer together even when living hundreds of miles apart. So we hope we can give people more time with family and friends this Christmas”.