French Lawmakers Push to Cut Fees on African Remittances Amid COVID-19 Slump

Deputies Sira Sylla (LReM) and Vincent Ledoux (Agir) are determined to support Africans by proposing a project to make tax-free the funds sent by African diasporas. Their goal is to encourage money transfers made by these African diasporas for the benefit of their families who remain on the continent, reports rewmi.com. According to the deputy Sira Sylla (LReM), the World Bank announced at the end of April a 23% drop in remittances to Africa for 2020, due to the crisis caused by the coronavirus.

For the same source, the financial flows from the diaspora represent colossal and essential sums for the consumption of African households. In 2018, remittances to Senegal represented 9.1% of GDP, twice the amount of official development assistance received that year by the country.

The other formula proposed by the parliamentarians is bibancarization. It aims to reduce transfer fees for diasporas living in France. Money transfers to Africa are the most expensive in the world, with 9% to 10% commissions charged per transaction and up to 20% for Southern Africa, while on average they are between 5% and 7% for other continents.

Despite this great risk, some families deny the obvious and many households use parallel sending circuits, based on the transport of cash or tontines, a traditional system of collective savings. She also argues that the relaxation of the "bibancarization" system could better meet the needs. This aims to give African banks the right to offer their services on French territory. According to Alain Gauvin, a lawyer in banking and financial law and partner at Asafo and Co, the first pan-African law firm, this instrument is virtuous in several respects.