In this digital age, why is it so expensive to send money back home?

IT’S not often I read World Bank reports. But last week, I bumped into an important one.

Titled “Migration and Development Brief”, the short document said remittances from migrants throughout the world were on the rise following a lull emanating from the global financial crisis.

This means that recovering economies were allowing migrant communities to send more money back home. This is a big deal.

Remittances are integral to so many homes across the globe. From Latin America to South-East Asia and Africa, they help people cope.

They might not drastically improve societal infrastructure but they can often mean the difference between a child going to school or working in a factory, or a house with a functional door or not. Remittances offer sustenance to ordinary life, everywhere.

The World Bank estimates that recorded remittances to developing countries are expected to grow by 4.8% to $450 billion (R6.2 trillion) this year. Nigeria is poised to be the fifth-biggest remittance-receiving country this year, with some $22bn. India heads the list with ($65.4bn) with China ($62.9bn) and the Philippines ($33bn), on its tail.

The numbers are fascinating, and illustrates the roaring and expanding success of India and China, but there were two other points in the report that got me thinking.

First, the report concluded that numbers of migrants and refugees to Europe – used by politicians to influence Brexit and inspire a new generation of far rightwing knuckleheads everywhere from Germany to France – were on the decline.

In other words, fewer migrants were headed to Europe.

Over the course of the last few years, political opportunists peddled myths arguing that Europe’s beloved cobbled streets were about to be conquered by brown and black Medievals in what became known as “Europe’s refugee crisis”.

But the facts have never changed.

Some 90% of the world’s refugees are housed in middle- to low-income countries, and not the fancy capitals or towns of western Europe.

Yes, hundreds of thousands of refugees had turned to Europe, but millions of others were located some place else.

The World Bank says even the numbers to Europe were slowing; I figure now is as good a time as any to clarify that there was never a migrant or refugee crisis in Europe. It was just European whiteness afraid of its own shadow. Those who drowned off the coast of Europe were murdered by Fortress Europe.

The second finding that grabbed my attention was the cost of sending remittances, or money back home. As of now, the global average cost for every $200 is around 7.2%. If you send to countries on the African continent, the average cost is 9.1%. If you sent money from South Africa or Angola to other southern African countries like Malawi, Zimbabwe, Zambia and the like – the cost can be up to 14%.

This is unacceptable and certainly has to change.

As per usual, Africa lags behind and its people suffer through a toxic mix of financial exclusion, high bank charges and money charger monopolies.

Costs are certainly dropping but it is way too slow and it’s hard to see how the UN will live up to its commitment to limit costs to 3% by 2030. Given that so much of the money is said to go to rural areas – where there is little access to banking – it seems ridiculous to be spending so much money on logistics in this day of infinite technological possibility.

This is not to say that lowering costs of remittances will change the African continent. We don’t need our governments to pass the buck of services and development on to private citizens. Neither do we want all our brightest to leave our shores, only to service the industrialised world as slaves to a warped northsouth labour system.

Remittances are great; they build family, community and society but we need not be fooled by the World Bank’s emphasis on remittances as a tool for development when countries remain unequal and most people are tremendously poor. Remittances cannot be seen as a substitute to state responsibility or the obligation to increase wages and the standard of living. Consider Liberia, The Gambia or Lesotho where remittances can make up anything from 15% to 25% of the the country’s gross domestic product. Remittances can’t compete in the face of high unemployment, poverty and corruption.

But neither does it mean that the cost of sending money home needs to be so high. It is the ordinary working and middle classes waiting tables, teaching, nursing or driving taxis and Ubers who are looking to assist their families in the short to medium term when they send money home. They are the ones being punished for their gesture.