The “OIC Statistical Outlook 2022: Remittance Flows and Costs in OIC Countries” presents the trends in remittances inflows and outflows to/from OIC countries and provides an analysis on the average costs associated with receiving and sending a remittance, and compares it with the flows of other components of foreign exchange, namely Official Development Assistance (ODA) and Foreign Direct Investments (FDI). The study shed light on the current progress of the OIC countries group towards the achievement of Sustainable Development Goal (SDG) 10.c that calls for reducing remittance transaction costs to under 3% of the amount remitted and eliminating remittance corridors with costs higher than 5% across all regions and countries by 2030.

The remittance inflows to the OIC countries group increased from 60.1 billion USD in 2005 to 162.6 billion USD in 2019 with a slight fall to 161 billion USD in 2020, due to COVID-19 related cuts in job opportunities. Likewise, remittances paid by the OIC countries to abroad including also other OIC countries showed a rapid increase from 37.4 billion USD in 2005 to 113 billion USD in 2014 which then decreased to 97.4 billion USD in 2020 due to the COVID-19 pandemic. Accordingly, the OIC countries accounted for nearly a quarter of global remittance inflows and outflows as of 2020.

Along with the total increase in remittances paid and received, the study draws attention to their rising economic significance in both recipient and provider countries. In 2005, the global value of remittances received as a percentage of GDP was estimated as 0.54% which then increased to 0.79% in 2020. In comparison, the value of remittances received as a percentage of GDP of the OIC countries group increased from 2.18% in 2005 to 2.54 % in 2020.

Concerning the cost of remittances, the global average cost of sending remittances to a receiving country as a proportion of total amount remitted has decreased from 9.3% in 2011 to 6.3% in 2021 which shows that the world average is still off-track to meet the target set in SDG 10.c. On the other hand, the average cost of sending remittances to the OIC countries group has been below the global average throughout the 2011-2021 period and decreased from 6.9% in 2011 to 4.9% in 2021.

As the study shows that some OIC countries are among the largest beneficiaries of remittances received as well the largest providers of remittances sent globally, there is more room for collective efforts to reduce the transaction costs of sending and receiving remittances among the OIC countries. In this connection, the OIC countries may consider introducing alternative transaction methods, particularly by encouraging private and public sector to invest more in fintech applications and blockchain technologies for sending and receiving remittances with affordable costs and favourable terms. From this end, building integrated messaging and information exchange system similar to SWIFT and SPFS among the banks of the OIC countries should be prioritised as a strategic long-term goal.

Online Electronic Version

• OIC Statistical Outlook 2022: Remittance Flows and Costs in OIC Countries (English)