EmaSwati Abroad Face High Remittance Costs

EmaSwati working abroad are facing significant financial burdens due to high remittance costs. A report by the Global Compact for Migration (GCM) found that emaSwati lose 16.4% of their remittances when sending money home. This is more than five times the United Nations Sustainable Development Goal (SDG) target of 3%. Remittances are a crucial source of income for many emaSwati families, covering expenses such as food, school fees, and healthcare.

The high transfer costs are affecting emaSwati working in various countries, including Taiwan, South Africa, Ireland, the United Kingdom, the United States, and Canada. To mitigate these costs, some emaSwati in Taiwan have resorted to pooling their money to reduce individual transaction costs. They combine their contributions into a single transaction before distributing the money among their respective families. This arrangement allows them to share the costs of international transfers.

The cost of transferring money from Taiwan to Eswatini is particularly high, with additional foreign exchange conversion charges. Some emaSwati have identified two local banks that offer reduced amounts, but deductions can reach as high as E500 on certain transactions. Those interviewed expressed dissatisfaction with the deductions but have become accustomed to them due to a perceived lack of control over the charges imposed by financial institutions.

Similar concerns were raised by emaSwati living in Ireland, Canada, and South Africa, who described the uncertainty surrounding the amounts ultimately received by their families. A doctor working in Canada explained that she deliberately sends more money than her family requires due to the unpredictable deductions during transfers. The high transfer costs have significant implications for emaSwati working abroad.

For example, a liSwati sending NT$30,000 to Eswatini would incur approximately E2,457 in transaction costs, leaving the recipient with about E12,525. If the transaction costs were reduced to the internationally targeted 3%, the charges would amount to approximately E449, leaving the family with E14,533. The difference of approximately E2,008 illustrates the substantial costs associated with high remittance costs.

The World Bank's data shows that the average cost of sending money from South Africa to Eswatini is 11.62%. At this rate, a transfer of E5,000 would attract approximately R581 in costs, leaving the recipient with about E4,419. The Rand and Lilangeni are pegged at parity, but processing fees and other charges may still apply. The cost varies considerably depending on the institution selected.

As increasing numbers of emaSwati seek employment opportunities abroad, concerns about high remittance costs persist. South Africa remains a significant destination, while others have travelled to Taiwan, Ireland, and Canada. The high transfer costs are a significant financial burden for emaSwati working abroad, highlighting the need for more affordable remittance services.

Key points

• EmaSwati working abroad lose 16.4% of their remittances due to high transfer costs.
• The high transfer costs are affecting emaSwati working in various countries, including Taiwan, South Africa, Ireland, the United Kingdom, the United States, and Canada.
• Reducing remittance costs to the internationally targeted 3% could significantly benefit emaSwati working abroad.