E-Financial
Western Union, Moneygram Hit Nigeria, Others with Charges
Western Union and Moneygram, the world’s leading money transfer companies, have been accused of charging a premium of up to 12 per cent on remittances into Africa, according to a recently released report by UK-based think tank The Overseas Development Institute (ODI), according to the Banker
Yet the banks in Africa appear to charge even higher.
The ODI report claimed that the two money transfer operators’ (MTOs) excessive charges cost African migrants approximately $1.8 billion annually, a significant leap from global rates.
“Migrants sending $200 home can expect to pay 12 per cent in charges, which is almost double the global average. While the governments of the G8 and the G20 have pledged to reduce charges to five per cent, there is no evidence of any decline in the fees incurred by Africa’s diaspora. There is no justification for the high charges incurred by African migrants,” the ODI said.
While it is difficult to pin down just how many Africans live outside their countries of origin, an assortment of statistics can paint a picture.
The World Bank said in 2011 that the number of Africans that have migrated outside their country of origin in recent decades is “conservatively” estimated to be more than 30 million (according to the United Nations, some 232 million international migrants are living in the world today) and has grown more than any other migrant community at 53 per cent in the past 10 years.
The OECD estimated that one in every nine persons born in Africa with a tertiary diploma lived in an OECD country in 2010-2011.
At the same time, the highest share of low educated migrants in the same period was recorded for migrants born in Sao Tomé and Principe (73 per cent), Cape Verde (68 per cent), Mali (67 per cent) and Guinea-Bissau (66 per cent).
The latest World Bank figures show that remittances from migrants are expected to rise to $436 billion this year, more than three times what poor countries receive in overseas aid. That number is expected to rise to $516 billion in 2016.
Nigeria alone accounted for about $21 billion, or 65.6 per cent of flows into the region, and is forecasted to bring in $41 billion of remittances in 2016.
The booming activity has led many banks in the region to establish Diaspora Banking services, including bonds, investments and remittance offerings.
However according to the ODI, banks are part of the price problem. While the ODI does not allege any sort of rate fixing between the two transfer companies, it notes that each one’s “exclusivity agreements” with banks and remittance agents in Africa have been one factor in the charges hike.
“Governments and regulatory authorities in sending countries should do far more to promote competition and encourage innovation,” The ODI said. “In an age of mobile banking, internet transfers and rapid technological innovation, no region should be paying charges at the levels reported for Africa.”
Yet remittance corridors within Africa actually charge the most excessive prices. The ODI reports that migrant workers from Mozambique sending money home from South Africa, or Ghanaians remitting from Nigeria, can face charges of more than 20 per cent.
“In several African countries, banks are the only agency authorised to conduct money-transfer operations, and typically partner with large MTOs,” the report noted. In countries where only banks are authorised to pay remittances, such as South Africa, Mozambique and Lesotho, half are agents of Western Union and MoneyGram.
According to The International Fund for Agricultural Development, banks in partnership with Western Union service about 41 per cent of payments and 65 per cent of all pay-out location.
The ODI says that there are 29 countries in Africa where banks account for over half of the in-bound remittance payments; in Ethiopia, Niger and Nigeria the share is more than 80 per cent.
All this begs the question: what do Diaspora Banking products at commercial banks provide? The service has risen over the past few years, and is already offered through many Sub Saharan African banks attempting to reach citizens scattered throughout the world.
Yet ODI reports that all of the world’s top ten remittance-charging corridors are in Sub Saharan Africa, with South Africa and Tanzania “figuring in all but one of these corridors.”
Migrants from Malawi, Mozambique and Zimbabwe employed in South Africa, and Ugandans remitting money home from Kenya face charges well over 20 per cent. In Ghana, Nigerian workers can expect to pay 39 per cent in charges.
“The very high charges levied on remittance corridors to and within Africa reflect the central role of banks – the most costly transfer vehicle,” said the ODI. Why are remittance charges for Africa so high?
The ODI says it’s difficult to answer that question, largely due to the “opaque nature of commercial operations.” For MTOs, cost structures and foreign currency exchange fees, including currency volatility measures, are not openly provided and no MTO has disclosed the terms of their commercial agreements with African banks.
World Bank has said that it has given approval of $300 million to fund a new project aimed at bolstering access to services and economic opportunities for internally displaced persons (IDPs) and their host communities in northern Nigeria.
In a release, the World Bank said the Solutions for the Internally Displaced and Host Communities Project (SOLID) was approved on August 7.
It stated that the project will adopt an integrated development strategy to help displaced persons and host communities transition from humanitarian aid to self-reliance and resilience.
It also said the ongoing conflict and insecurity in the region have displaced more than 3.5 million people, straining infrastructure and deepening competition for scarce resources in affected communities.
The bank said SOLID will build on previous government and partner interventions, including the multi-sectoral crisis recovery project (MCRP), which focused on emergency recovery.
“Key areas of focus include building climate-resilient infrastructure, promoting social cohesion, supporting livelihoods, and strengthening institutions to better respond to the pressures of forced displacement.
“We are glad to support this initiative which has a tremendous potential to help Nigeria in addressing development challenges associated with protracted displacement in a sustainable way,” Mathew Verghis, World Bank country director for Nigeria, said.
“The Project’s integrated approach which is aligned with the National IDP Policy and the FGN’s long-term development vision will ensure that IDPs and host communities can transition from dependency on humanitarian assistance to self-reliance and resilience which will open up better economic opportunities,” it added.
The World Bank, which noted that the cproject is expected to benefit up to 7.4 million people, of whom up to 1.3 million individuals are identified as IDPs, added that the project will be implemented through a coordinated, community-driven approach involving all tiers of government, with strong partnerships from international stakeholders.
United Bank for Africa (UBA), Plc, Africa’s Global Bank, has launched its revamped Group website to enhance users’ digital experience.
The newly revamped website boasts of a faster, smarter, and more dynamic digital platform, designed to deliver live news updates, real-time Nigerian stock prices, and a world-class user experience among other world-class features.
The upgrade marks a significant leap in the bank’s digital transformation journey, setting new standards for speed, accessibility, and innovation in the African banking industry.
Alero Ladipo, group head, Marketing and Corporate Communication, UBA, who spoke excitedly about the revamped website, explained that the redesign focuses on simplifying user-journey, improving responsiveness across all devices, and incorporating a language-agnostic interface that caters to the bank’s diverse global audience.
She explained that with its sleek, intuitive layout and enhanced navigation, the site empowers customers, investors, and stakeholders to access critical information instantly – whether it is the latest market movements, breaking financial news, or UBA’s wide range of products and services.
Ms Ladipo said, “We are thrilled to unveil our new website, which represents a significant milestone in our digital transformation journey. Our goal is to provide a world-class digital experience that meets the evolving needs of our customers and stakeholders.”
Continuing, she added, “A major highlight of the upgrade is its speed, powered by an upgraded server infrastructure with enhanced load balancing to ensure minimal downtime and lightning-fast performance. By combining speed, accessibility, and live market intelligence, our new platform strengthens our position as an industry leader.”
She pointed out that the site also integrates automated news updates powered by International agency, Bloomberg and real-time stock prices tracking, ensuring visitors remain informed at all times.
Throwing more light on the new features, Amanda Oguamanam, head, Digital and Online Marketing, UBA, said; “We have transformed our website to be faster, cleaner, and more engaging, removing clutter by over 60%, upgrading servers for speed and reliability, streamlining navigation, and tailoring content to inspire global partners while making it easier for customers to find what they need.”
Other standout features, she added, include improved accessibility for users with disabilities, dark/light mode toggle, advanced search functions, and a simplified content structure, which are all designed to deliver an inclusive, modern experience for a global audience.
The revamped website is live and accessible at www.ubagroup.com.
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.
Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting-edge technology.
Nigeria’s Value Added Tax (VAT) revenue surged to ₦6.72 trillion in 2024, marking an 84.6% increase from ₦3.64 trillion in 2023, according to the National Bureau of Statistics (NBS). This sharp rise reflects stronger economic activity and improved tax collection efforts across key sectors.
VAT revenue showed consistent growth throughout the year. In Q1 2024, collections stood at ₦1.43 trillion. This rose to ₦1.56 trillion in Q2, representing a 9.09% increase. Q3 recorded ₦1.78 trillion, up 14% from the previous quarter, while Q4 peaked at ₦1.95 trillion, a 9.5% rise from Q3.
In Q4 alone, VAT collections totaled ₦1.95 trillion, with domestic VAT payments contributing ₦917.40 billion, non-import foreign VAT at ₦554.68 billion, and import VAT at ₦474.75 billion. Domestic VAT remained the largest source, indicating strong local business activity and consumer spending.
Several sectors posted significant quarter-on-quarter growth in Q4. Extraterritorial organisations and bodies saw a dramatic rise of 180.05%, followed by agriculture, forestry and fishing at 70.83%, and human health and social work at 46.13%. These gains suggest increased operational scope, improved compliance, and possibly targeted government incentives.
However, not all sectors fared well. Households as employers and self-use production contracted by 28.97%, while the information and communication sector declined by 23%. The drop in ICT may reflect shifting market dynamics or regulatory headwinds affecting digital services.
Overall, the surge in VAT revenue signals a positive fiscal outlook for Nigeria, with implications for budgetary planning, infrastructure investment, and social services funding. It also highlights the importance of sector-specific monitoring to sustain momentum and address emerging challenges.
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