The cost of sending remittances is higher than 3% in 28 countries

International Day of Family Remittances on June 16 puts the spotlight on the critical role played by remittances in development.  Remittances are monetary transfers sent by workers living abroad to their families at home. The ability to find employment abroad and send money home is critical for many of the world’s most economically disadvantaged people (SDG  target 17.3). The top five countries where remittances contribute over 25% of GDP are all lower-middle-income countries: Tajikistan (38.4%), Samoa (28.2%), Nicaragua (26.2%), Honduras (26.1%), and Nepal (25.4%).

For this reason, the UN has set a target of reducing average remittance transaction costs to less than 3% globally (SDG target 10.c). If this target were met, families dependent on remittances would save an additional US$20 billion annually worldwide, according to the UN and World Bank. In addition, by decreasing costs, families would have more capacity to increase the amount sent home.

Between 2016 and 2023, remittance transaction costs have seen a noticeable decrease in most countries. Over 90% of countries (76 economies) with available data experienced a decrease in remittance transaction costs. Of the countries where costs decreased, 63% or 48 economies, met the SDG target of 3%. Lesotho benefitted from the largest reduction, from 16% in 2016 to 2% in 2023.  

Although transaction costs have decreased in many countries, efforts to reduce the price tag for sending remittances must continue, particularly in Sub-Saharan Africa, where costs remain high. Sierra Leone, Uganda, Angola, Botswana, and Zambia are among the economies with the highest transaction costs, all greater than 7% in 2023.