- Nigeria is the biggest remittance destination in Africa with annual diaspora remittances in excess of $21 billion
- Africa is traditionally one of the most expensive remittance destinations in the world
- Our research shows that Exchange4free are cheapest online money remitter to Nigeria offering highly competitive NGN exchange rates
Nigeria is the biggest remittance destination in Africa with annual diaspora remittances in excess of $21 billion per annum and is currently ranked as the 5th largest destination country in the world behind India, China, Philippines and Mexico.
Nigeria is also the fastest growing remittance market in Africa providing a lifeline to poor families back home who typically face serious challenges in terms of monthly expenses, nutrition, access to health care and education.
Remittances into Sub-Saharan Africa experienced modest growth of 1 percent in remittances in 2015, compared to 0.2 percent in 2014 however remittances into the region are expected to increase further in 2016 by 3.4 percent, to $36 billion.
The Nigerian remittance market is a key driver in these figures with diaspora worldwide sending more money into Nigeria than in previous years with the largest remittances into Nigeria coming from the USA, United Kingdom and Australia respectively. Around $5.7 billion was sent to Nigeria from the US and $3.7 billion from the UK in 2015 with the large majority of these remittances being to support family and friends back home in Nigeria.
Africa is traditionally one of the most expensive remittance destinations in the world with high costs and government red tape prohibiting the ability of both Banks and Money Service Businesses (MSB’s) to drop pricing into the region.
Nigeria, up until recently, has been an outlier in terms of pricing with the costs of remittances into Nigeria costing as low as 1%. These low costs have contributed to the strong increase in money flows into Nigeria with the Central Bank of Nigeria (CBN) creating and supporting a regulatory framework conducive to low costs driven by an efficient money transfer system. The Central Bank for many years allowed money to be sent into Nigeria freely from abroad.
So what has changed?
The oil price.
The Nigerian economy is hugely dependent on the price of oil and similarly producing enough oil to sell internationally in order to earn foreign currency.
As per the below chart below the price of Crude Oil has dropped from a high around USD 150 in 2008 to below USD 30 in early 2016.
Insurgency in the oil-rich South of Nigeria has similarly affected production further affecting Nigeria’s ability to generate foreign currency revenues.
The above, and various other factors including sustained attempts by the CBN to manipulate and fix the NGN exchange rate, have resulted in a liquidity and currency crisis in the country. Foreign currency cash has moved out of the banking system into the ‘street’ or informal market resulting in a parallel or black market for foreign currency cash.
It’s a simple supply versus demand scenario. The demand for foreign currency far exceeds the supply resulting in a liquidity crisis which has resulted in a booming street trade and rates trading well in excess of the CBN’s fixed rates.
The official GBPNGN rate is around 455 with the street rates currently trading at 530 representing a premium of around 16%. Over the past 6 months the street NGN rate has traded up to 60% higher than the official Central Bank rate. An NGN revaluation in August 2016 by the Central Bank saw this premium drop significantly however it has not achieved the objective of bringing liquidity back into the banking system.
The street continues to trade in large volumes of NGN and importers simply cannot get their hands on foreign currency via the banks (who in turn cannot get foreign currency from the Central Bank whose reserves and foreign currency earning capabilities have significantly diminished).
Exchange4free launches unique ‘Cash Rewards Programme’ to Nigeria
Our research shows that Exchange4free are cheapest online money remitter to Nigeria offering highly competitive NGN exchange rates coupled with a unique Cash Rewards Programme.
The Cash Rewards Programme is a loyalty programme developed by Exchange4free and offered to a number of countries across Nigeria where clients can earn loyalty cash rewards that are either added to the Payout Amount or deducted from the Sending Amount paid by the person sending the money to Nigeria.
It is important for clients to always consider both the NGN Exchange Rate and Transfer Fees when comparing money transfer providers. It is the combination of the above two cost factors that determines the actual cost of a remittance.
The Exchange4free Cash Rewards Programme acts like a positive Transfer Fee that is paid to the sender or recipient as an additional cash bonus representing a unique service and price offering to the Nigerian remittance market.
Exchange4free services the Nigerian diaspora in over 40 countries worldwide including the United Kingdom, Australia, New Zealand, All of Europe, Scandinavia, Canada, South Africa and others offering a highly competitive NGN exchange rate plus amazing cash rewards. Clients can register, login and send money online to Nigeria 24 hours a day, 7 days a week via the website www.exchange4free.com
Alternatively, clients can download the Exchange4free App to send money home to Nigeria as easily as sending a simple instant message. The App is an ‘Instant Messaging’ or Chat based App meaning that clients can register and send money all within a simple and user friendly chat based App. Further to this clients can speak to a live customer service consultant 24 hours a day, request quotes, track transfers, buy airtime and create beneficiaries. The App developed by Exchange4free has dropped the time to send money to Nigeria down from around 1 minute via a computer to less than 20 seconds via the Instant Messaging App.
Exchange4free are one of the leading remittance companies into Africa servicing over 50,000 clients worldwide many of whom are Nigerians remitting money home on a monthly basis now taking advantage of the unique service and pricing model offered by Exchange4free.