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Tuesday, 11 December 2018

Egypt is expected to be among the world’s top recipients of remittances in 2018

Egypt is expected to be among the world’s top recipients of remittances in 2018, with inflows from Egyptians working abroad expected to reach USD 26 bn by the end of the year, up 14% y-o-y from USD 18.2 bn last year, according to the World Bank’s Migration and Development Brief (pdf). Remittances are projected to account for 10.8% of Egypt’s GDP this year, up from 5.5% in 2017. The increase in flows to Egypt leads outpaces the growth in the same gauge for the wider MENA region, which is expected to come in at 9.1% this year.

The cost of sending home remittances in the MENA region remains higher than the global average despite declining slightly to 7% in 3Q2018 from 7.4% in 3Q2017, the report notes. The global average in 3Q2018 was 6.9%. However, costs are considerably lower when sending from GCC countries to Egypt than, say, from high-income OECD countries to Lebanon. “Even with technological advances, remittances fees remain too high, double the [Sustainable Development Goals] target of 3 percent,” says World Bank Senior Vice President Mahmoud Mohieldin.

Would someone please (pretty please?) ‘disrupt’ this industry? Are transaction fees that high in an industry that is this digitalized not an unjust tax on the poor? Modern-day usury, almost? Not to get all socialist-nationalist on all of you this morning, but why are central banks around the world not regulating this a little bit more tightly?

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