Revealed: Shocking Amount Immigrants Are Sending Out of South Africa!
Migrants from the Southern African Development Community (SADC) have been sending billions back to their countries of origin. The South African Reserve Bank (SARB) confirmed that over R100 billion has been transferred out of South Africa using authorized remittance providers since 2016. Public comments are currently being taken on legislation to regulate alternative remittance providers.
The facilitation of remittances, which are cross-border payments made by foreign nationals, aligns with a G20 goal and the United Nations’ Sustainable Development Goal (SDG) 10, which aims to reduce global inequality. Supported by the SARB, the FinMark Trust (FMT) recently released a report that highlights the increasing remittance outflows from South Africa, jump from R6 billion in 2016 to an expected R19.3 billion in 2024. Lesotho, Zimbabwe, Mozambique, and Malawi account for 90% of all payments.
From 2016 to 2024, total remittances from South Africa to SADC countries reached R112.6 billion, with Zimbabwe alone receiving R47.2 billion between 2020 and 2024. An earlier study found that 56% of SADC migrants in South Africa had sent money to their home countries in the prior 24 months.
Most outflowing payments consist of small transfers, as highlighted by the R14.2 billion sent in individual payments of less than R1,900 in 2014. However, there were also inflows of remittances from SADC countries, totaling R25.6 billion between 2016 and 2024, leading to a significant discrepancy in remittance flows.
The number of authorized remittance providers in South Africa increased from 48 in 2021 to 55 in 2024, incorporating services like mobile wallets and bill payments. Cash remains the preferred payment method for most transactions, particularly from South Africa to Zimbabwe and Malawi.
The draft legislation under consideration aims to include informal remittance providers in the regulatory framework to enhance oversight without compromising financial inclusion. The G20 recognized that access to remittance flows is vital for the poorest individuals, citing its importance in providing sustainable paths out of poverty.
Cross-border remittances are essential for millions of households across SADC, positioning South Africa as the region’s key economic hub. Reports indicate that these payments are increasingly included in national GDP calculations, reflecting their importance for economic development and poverty alleviation in recipient countries.
