Cross border remittances decline by 7%

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Sharon Kavhu

Windhoek- SADC's executive secretary Dr Stergomena Tax said the cost of cross boarder remittances has reduced by seven percent from an average of 20 percent transaction to about 13 percent in the corridor between South Africa, DRC, Eswatini, Lesotho, Malawi and Mozambique.

Speaking at the official opening of the council of ministers meeting at the Safari Court Hotels on August 13, Dr Tax said increasing cross border remittances is part of the implementation plan for the SADC financial inclusion strategy and SMEs access to finance which was adopted this year.

“One of the areas of focus in the plan is to facilitate cross border remittances, which are critical for financial inclusion. The main challenge with remittances is the high cost of remitting the money across the borders, however, it is planned that in the next 18 months the costs will be to meet the G20 target of 5 percent per transaction,” said Dr Tax.

She urged member states and the private sector to take advantage of the SADC Real Time Settlement System and SADC financial inclusion strategy to reap the benefits from intra and inter-regional trade.

Dr Tax highlighted the progress that was made in the roll out of the SADC Real Time Settlement System by moving from single currency settlement system, rand settlement into a multi-currency settlement system with the US$ as the additional currency of the settlement.  

“Settlement in US dollars on the current platform is expected to go live in October 2018, while the whole multi-currency platform is expected to be fully operational by December 2019. Noting that the facilitation of payments remains a key challenge to intra-SADC trade, the addition of the US dollars, which account for about 60 percent of intra-SADC cross-border transactions is expected to facilitate greater cross-border trade and investment in the region. Notable progress has also been made in making the system a more inclusive payment platform, which will also deal with low value cross border payments in the region,” she said.

She said the development is a milestone which is important in consolidating progress and catalysing developments in some of the milestones already attained by the region in particular the SADC Free Trade Area.

 Dr Tax expressed heartfelt appreciation to South Africa’s Minister of International Relations and Cooperation Dr Lindiwe Sisulu for the support she gave as chairperson of the SADC Council of Ministers and Eswatini for all the efforts in promoting regional integration during its tenure as a member of the SADC Troika.

The SADC executive secretary acknowledged the tenure of Botswana’s secretary for Economic Affairs who has been the SADC's National Contact Point for Botswana for the past 12 years.

 

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