Windhoek - The Southern African Development Community recorded R6,87 trillion (US$460 billion) in Real Time Gross Settlement (RTGS) transactions as the bloc continues to make strides towards building sound financial infrastructure and boost efficiency in payments.
A new SADC report says all member states (except Comoros) are participating in the SADC-RTGS system, and a total of 85 central and commercial banks are also participating.
The SADC-RTGS system has performed exceptionally since going live in July 2013, with more than 1,7 million transactions worth nearly half a trillion US dollars settled as at the end of March 2020.
On financial inclusion, the SADC report says 32 percent of adults, or about 45,7 million people, in the region are financially excluded against a target of getting the figure below 25 percent by 2021. National levels of financial exclusion vary considerably across the region, from just three percent in Seychelles to 60 percent in Mozambique.
As per the decision by the Ministers of Finance and Investment at their meeting in Namibia in July 2019, the operationalisation of the SADC Financial Inclusion Subcommittee is ongoing. The main objective is to co-ordinate advancement on financial inclusion and build synergies between the structures dealing with financial inclusion across Southern Africa.
With regards to cross-border remittances, which are critical for financial inclusion and poverty alleviation, the main objective is to lower the average cost of remittances and to increase use of formal channels.
The cost of cross-border remittances has been reduced by 3,6 percent from an average of 13 percent of the transaction cost to about 9,4 percent in the corridor between Botswana, eSwatini, Lesotho, Malawi, Mozambique, South Africa, Tanzania, Zambia and Zimbabwe. The aim is to reduce costs to meet the United Nations Sustainable Development Goals target of three percent by 2030.
SADC migrants resident in South Africa are estimated to remit approximately R21,9 billion (US$1,4 billion) home annually, with 52 percent of this going through informal channels.