NAIROBI, Oct. 17 (Xinhua) -- The exorbitant cost of sending remittances incurred by African diaspora will be dealt with as a matter of urgency by governments and the financial sector in the continent, an Africa Union (AU) official said on Monday.
Moustapha Sidiki Kaloko, AU Commissioner for Social Affairs, told at a forum in Nairobi that a raft of policy and regulatory tools are in work to lower the cost of sending remittances by African diaspora.
"A dialogue among governments, banks and multilateral partners has intensified to find durable solutions to the high transaction costs incurred by African diaspora while sending money back home," Kaloko said.
He revealed that in 2015 alone, 30 million African diaspora sent an estimated 65 billion U.S. dollars to their native countries.
The AU has partnered with several multilateral partners to strengthen the capacity of countries to harness diaspora remittances to foster socio-economic development.
Kaloko said that diaspora remittances have surpassed foreign aid to become the largest source of finance for critical sectors like education and health in Africa.
"We are hoping that once the cost of sending remittances is reduced, African countries will be able to stimulate investments and entrepreneurship," said Kaloko.
The cost of sending remittances in Africa stands at 9 percent compared to the global average of 7 percent.
Kaloko said that discussions are at an advanced state with telecommunications giants, banks and money transfer agents to ensure the cost of sending remittances is reduced to 3 percent.
"As for now, the urgency is to harmonize policies and laws governing diaspora remittances and reach a consensus on how these funds can be transmitted at a bare minimum cost," Kaloko said.
Jeffrey Labovitz, Regional Director for east and horn of Africa at the International Organization for Migration (IOM), said that tax rebates and adoption of mobile banking will help reduce cost of cross border transfer of funds.
