The true cost of transfers to Africa
Sending money to sub-Saharan Africa remains more expensive than to any other region of the world. Behind the visible fees lie exchange rate margins, financing costs, settlement infrastructure, and significant differences from one corridor to another. Understanding where these costs are generated provides a better understanding of the ongoing transformation of cross-border payments in Francophone Africa.
The mechanism
A person in Paris sends 200 euros to their family in Abidjan. Simple. Quick. Or so it seems. Depending on the operator and channel chosen, part of this sum can be absorbed before the money even arrives in Abidjan. The question is simple: where does it go?
Depending on the transfer model, the money may pass through several intermediaries: a money transfer operator, correspondent banking infrastructure, and a local disbursement partner. Each step introduces friction. Each step incurs a cost. Often invisible to the user.
The fees displayed by operators represent only one component of the total cost. Depending on the corridor and the provider, the sender may also incur exchange rate margins, financing fees, or other costs, the relative weight of which varies considerably depending on the operator and payment channel. This is what makes comparisons difficult: a transfer may appear inexpensive when considering only the displayed fees, while the total cost may be significantly different once all components are added together.
The amounts used in the video are illustrative. They show the actual cost of a transfer when visible fees and exchange rate margins are added together. Actual costs vary depending on the operator, the channel, the amount sent, and the withdrawal method.
The advertised fees only tell part of the story. The rest lies in the exchange rate margin, financing fees, or other costs, the weight of which depends heavily on the corridor and the provider.
The African context
Sub-Saharan Africa remains the most expensive region in the world for sending money. According to the World Bank's Remittance Prices Worldwide database, the average cost reached 8,46% in the third quarter of 2025, well above the 3% target set by UN Sustainable Development Goal 10.c and subsequently reaffirmed by the G20. The gap remains considerable, even though the regional average fluctuated within a narrow range of around 8% in 2024 and 2025.
The France–Côte d'Ivoire, France–Senegal, and France–Cameroon corridors represent important routes between Europe and West and Central Africa. Cost levels vary widely: World Bank data by corridor for the third quarter of 2025 show total average costs on these specific routes significantly lower than the regional average of 8,46%. However, significant differences remain between services, with digital options generally among the least expensive and cash-disbursed services among the most costly. These results are quarterly snapshots and may vary depending on the provider, channel, and amount sent.
Key Concepts
Three structural characteristics determine the cost architecture of transfer corridors. Understanding them is essential for correctly interpreting any claim regarding cost reductions.
In 2024, officially recorded diaspora remittances to sub-Saharan Africa were estimated at around $56 billion, making them one of the continent's largest external financial flows. The problem isn't solely technological. Market structures, regulations, competition, and payment infrastructure all contribute to maintaining high costs.
Three levers exist: transparency, so that operators display the true total cost, including fees and exchange rate margins, rather than just the visible costs; infrastructure, with greater interoperability of mobile money between UEMOA countries and less reliance on correspondent banks in areas where they remain necessary; and finally, competition, as digital services often appear among the least expensive options in World Bank reports. Each of these levers is real. Each is progressing at a different pace depending on the market.
The United Nations set a target of 3% under SDG 10.c, which was subsequently reaffirmed by the G20. Progress varies greatly depending on the corridor and the sending country, and sub-Saharan Africa remains, at the regional level, the furthest from this target.
- Now that the BCEAO's regional instant payment infrastructure, PI-SPI, is operational, will its adoption progress quickly enough to make cross-border mobile money transfers the norm rather than the exception for individuals within the UEMOA?
- Will UEMOA regulators extend existing fee transparency requirements to explicitly include the exchange rate margin and reduce the gap between advertised fees and the total cost?
- Can competitive pressure from Wave and comparable players push Western Union and MoneyGram to reduce their margins on French-speaking corridors, or will the incumbent operators retreat to less contested rural and peri-urban segments?
What is changing today
The infrastructure layer is evolving, slowly but measurably. Several developments that occurred between 2024 and mid-2026 deserve to be monitored by companies and investors active in Francophone African markets.
AfricaNenda and the agenda for inclusive instant payment systems. The fourth edition of the State of Inclusive Instant Payment Systems in Africa report, launched in Eswatini in November 2025, indicates that instant payment systems in Africa processed nearly $2 trillion in transactions in 2024. As of June 2025, the SIIPS (State of Inclusive Instant Payment Systems in Africa) counted 33 national systems and three regional systems—GIMACPAY, PAPSS, and TCIB—for a total of 36 operational instant payment systems in 31 country. Five new national systems had been launched in the preceding twelve months: in Algeria, Eswatini, Libya, Sierra Leone, and Somalia. The launch of PI-SPI in September 2025 then brought the number of regional systems to four. In the CEMAC zone, AfricaNenda continued its work with GIMAC to expand the interoperability and adoption of the GIMACPAY system.
BCEAO and cross-border payments in the UEMOA. The Central Bank of West African States (BCEAO) officially launched PI-SPI, its interoperable instant payment platform, on September 30, 2025. The BCEAO publishes and updates the list of approved participants; therefore, the number of institutions actually accessible to the public may change. The question for 2026 is no longer whether the infrastructure exists, but rather the extent of institutional coverage, the degree to which e-wallets are effectively integrated, and how quickly widespread public adoption will follow. PI-SPI covers payments within the West African Economic and Monetary Union (UEMOA): it does not, on its own, eliminate the frictions of the corridors between Europe and West Africa, where international settlement mechanisms and compliance obligations continue to influence costs.
The G20's Agenda 2025. Under South Africa's G20 presidency in 2025, cross-border payments were a central focus. AfricaNenda participates in the CPMI's Cross-border Payments Interoperability and Extension (PIE) working group, established in early 2023. This group supports the G20 roadmap on cross-border payments by developing recommendations on interconnecting payment systems and harmonizing standards across jurisdictions. The ambition is clear: to reduce infrastructure costs so that savings are passed on to the end user. The implementation timeline remains uncertain.
Competitive pressure from new entrants. Across several corridors between France and West Africa, World Bank data for the third quarter of 2025 shows that the cheapest digital shipping options are now close to, or even below, the 3% target, and far below the regional average. At the same time, services involving cash disbursement are often among the most expensive options. The benchmark is shifting for tech-savvy and digitally savvy shippers. The question is whether this shift will reach the mass market or remain concentrated among urban shippers who are already adept at comparing providers.
What would a 3% world look like?
The 3% target set by UN SDG 10.c, and subsequently reaffirmed by the G20, is not merely a technical indicator. It raises a crucial question of scale: what share of what senders currently pay in fees and exchange rate margins could remain in the hands of the households sending and receiving these funds? On a large scale, the amounts become significant. The scenario below, however, remains a theoretical construct by Africa Signal, not an official statistic.
The calculation below is illustrative. It is based on the World Bank's estimate of $56 billion in remittances to sub-Saharan Africa in 2024 and an assumption ofAfrica Signal According to this estimate, Francophone West and Central Africa would account for 15 to 20% of these flows, or approximately $8 to $11 billion annually. This regional share is not an official statistic. If these hypothetical flows incurred a cost of 8,46%, approximately $675 to $930 million would be spent on remittances each year; at 3%, this amount would be $240 to $330 million. The arithmetic difference thus reaches $435 to $600 million per year. This is a sensitivity test based on the average for all of sub-Saharan Africa, and not on a measured average of Francophone corridors. The actual effect would also depend on how a reduction in costs would be distributed between the sender and the recipient.
Cost gap analysis
Illustrative scenario based on $9.5 billion in annual transfers
Comparison between the theoretical cost at the average level observed in sub-Saharan Africa and a cost aligned with the 3% target of SDG 10.c.
| Annual flow | Current estimated cost | Cost at 3% | Potential savings |
|---|---|---|---|
| $9.5 billion | $ 804 million | $ 285 million | $ 519 million |
Range of the complete scenario: $435 to $600 million in potential savings per year.
Africa Signal illustrative scenario based on aggregated World Bank data. This is neither an official statistic nor a measured average of Francophone corridors alone. Do not cite as a primary source.
For beneficiary households. In Francophone Africa, diaspora remittances often support household consumption and essential expenses such as food, education, healthcare, and housing. Lower transfer costs represent savings that can benefit the sender, the recipient, or both, depending on how they are distributed. At the household level, an improvement of just 2 to 3 percentage points on a regular $200 transfer represents potential savings of $4 to $6 per transaction. Multiplied by millions of transfers, the aggregate effect on household purchasing power can become significant.
For local economies. Higher net transfers fuel local consumption and investment in small businesses. In economies where domestic demand is a major driver of growth, the multiplier effect of additional household income is well documented. More broadly, research on households receiving transfers shows higher spending on education and health than among households that do not, with long-term effects on human capital development.
For the public authorities. Increased use of formal transfer channels can improve the measurement of external flows and enhance visibility into foreign exchange inflows. Transfers can also provide some macroeconomic resilience, with research showing they often exhibit countercyclical behavior in recipient economies.
India and the Philippines demonstrate that large, competitive, and increasingly digital remittance markets can achieve significantly lower costs than the sub-Saharan African average on major corridors. World Bank data shows several corridors to these two countries with costs of 3% or less, although costs continue to vary considerably depending on the country of origin and the service provider.
The structural difference in Francophone Africa is not due to a single cause. Mobile money infrastructure exists, and PI-SPI is now operational in the UEMOA, but adoption, effective interoperability, competition, liquidity, and total price transparency still vary considerably across corridors. These factors represent, in concrete terms, part of the gap between the current situation and a 3% global market.
The cost is not an abstract concept. According to Africa Signal’s illustrative scenario, a reduction in transfer costs could generate several hundred million dollars in potential savings per year for sending and receiving households in the region. This is the public policy issue behind transfer fees.
Regional and corridor cost figures: World Bank, Remittance Prices WorldwideIssue 54, Q3 2025, and data by corridor for a remittance equivalent to $200. Estimated flow of $56 billion to sub-Saharan Africa in 2024: World Bank 2024 estimate. Target of 3% and ceiling of 5% per corridor: United Nations, SDG 10.c, included in the objectives of the G20 roadmap on cross-border payments. Data on instant payment systems: AfricaNenda Foundation, State of Inclusive Instant Payment Systems in Africa 2025Launch, operation and participants of PI-SPI: BCEAO, official PI-SPI websiteCorridor averages are quarterly snapshots and do not constitute permanent rates. The assumption that Francophone West and Central Africa accounts for 15 to 20% of remittances to sub-Saharan Africa is not an official statistic; it serves only as an illustrative scenario. Africa SignalThe $435 million to $600 million range therefore represents a sensitivity calculation, not a measured cost. All analytical conclusions are based on the editorial judgment of [author's name].Africa Signal.
