Exploring the barriers to remittances in sub-Saharan Africa

Sub-Saharan Africa is the most expensive region globally for remittances, with an average cost of 8.9% of transaction value. The report identifies critical supply-side barriers including onerous KYC requirements, lack of digital ecosystems, and fragmented payment infrastructure. It recommends a shift toward risk-proportional AML-CFT regulation, the adoption of digital identity systems, and the integration of regional payment rails to reduce informality and costs.

• Sub-Saharan Africa (SSA) is the most expensive region globally for sending remittances, with an average cost of 8.9% of the transaction value, compared to a global average of 6.8%. In some specific countries, these fees can reach 16% of the transfer value.
• Intra-SSA remittance flows are growing more rapidly than flows from outside the region, with a 22% increase between 2012 and 2016, while external flows grew by only 7% in the same period.
• There is a significant mismatch between migration patterns and formal remittance flows, likely due to high informality. For example, while 62% of immigrants in Côte d’Ivoire are from Burkina Faso, flows to Burkina Faso from Côte d’Ivoire represent only 13% of remittance flows.
• Onerous know-your-customer (KYC) and anti-money laundering (AML-CFT) requirements, such as mandatory proof of address, drive consumers toward informal services and increase provider costs. These requirements disproportionately affect women and rural populations who lack official identification.
• The persistence of cash-based transactions is reinforced by a lack of digital ecosystems that allow recipients to spend digital value. This forces providers to maintain costly cash-in/cash-out networks at the 'last mile'.
• National payment systems (NPS) in most SSA countries are unsustainable due to a lack of scale, leading to a duplication of infrastructure that fragments the market.
• The report recommends that regulators adopt a risk-based approach (RBA) to AML-CFT rather than a tick-box compliance method, and implement tiered licensing to encourage competition from non-bank providers.
• To reduce costs and increase efficiency, the report suggests moving toward 'channel ubiquity' using standard messaging formats like ISO 20022, rather than just interoperability between siloed systems.
• Development partners are urged to stop funding unsustainable domestic payment schemes and instead support regional integration, technical capacity building for regulators, and research into under-funded areas like offline digital identity.

APA

Esser, A., & Cooper, B. (2020). Exploring the barriers to remittances in sub-Saharan Africa. FSD Africa. https://fsdafrica.org/wp-content/uploads/2025/05/Vol-7_Removing-the-barriers-to-remittances-in-SSA_-recommendations_FINAL.pdf

Chicago

Esser, Antonia, and Barry Cooper. Exploring the barriers to remittances in sub-Saharan Africa. FSD Africa, 2020. https://fsdafrica.org/wp-content/uploads/2025/05/Vol-7_Removing-the-barriers-to-remittances-in-SSA_-recommendations_FINAL.pdf.

Wikipedia

{{cite report |last1=Esser |first1=Antonia |last2=Cooper |first2=Barry |title=Exploring the barriers to remittances in sub-Saharan Africa |publisher=FSD Africa |date=April 2020 |url=https://fsdafrica.org/wp-content/uploads/2025/05/Vol-7_Removing-the-barriers-to-remittances-in-SSA_-recommendations_FINAL.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{esser2020exploring, author = {Esser, Antonia and Cooper, Barry}, title = {{Exploring the barriers to remittances in sub-Saharan Africa}}, institution = {FSD Africa}, year = {2020}, month = apr, url = {https://fsdafrica.org/wp-content/uploads/2025/05/Vol-7_Removing-the-barriers-to-remittances-in-SSA_-recommendations_FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }