Nigeria ranks top in Africa and fifth globally as a remittance destination behind India, China, Philippines and Mexico. The country has seen a significant rise in inflows year on year for the past two decades.
Despite the rise in remittances, Nigeria, much like other sub-Saharan Africa countries faces some of the highest money transfer costs. The World Bank Group Q3 2018 Remittance Prices Worldwide report shows that Africans in the diaspora spend 8.96% on average to send money home against a 6.94% global average.
However, the costs vary depending on the service provider and the mode of transfer you choose. Therefore, before sending money home, it helps to know the different ways you can do so and what you are required to provide.
For your loved ones, you need to know how they can receive the remittances, any documentation they need to provide and other considerations to make when sending.
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There are multiple ways to easily send and receive money in Nigeria but these will largely depend on the provider you decide to use. Below you will find everything you need know about sending and receiving money.
If you want to send money to your family, relatives and friends in Nigeria, there are several options available. You can use bank transfers, online money transfers or checks and money orders.
Online money transfer is the fastest, simplest, and cheapest option to use when transferring money to Nigeria.
Senders have the option of transferring money from the website, mobile apps, or deposit cash from physical stores. Some of the providers allow their clients to use Facebook messenger or Sendbot.
To send money through online money transfer services, you’ll have to first sign up for an account. Funding the account is simple and can be done using debit cards, credit cards, bank transfers or cash deposits.
Once you’ve funded your account; you can use any of the options below to move your money across to the recipient. The choice of method depends on your personal preferences and those of the beneficiary. Below are the different modes you can use:
There are several money transfer service providers you can use to send money to Nigeria. Some of the popular ones include Western Union, MoneyGram, Xoom, TransferWise, WorldRemit, and Azimo.
This mode of money transfer is the oldest and expectedly the slowest. It involves one or more intermediary banks that facilitate the movement of funds between the sending bank and the receiving bank. It is relatively expensive, and the exchange rate given can be punitive.
Though not commonly used, money orders and cheques are still are a valid way to send money to Nigeria. Western Union, MoneyGram, UBA, GTBank, and First Bank are some of the providers that support money orders and checks.
Money transfer service providers are fully aware of the financial risks involved in sending and receiving money. Therefore, they require senders to provide identification documentation. When transferring money to Nigeria, you’ll have to provide the following information:
The information required may differ depending on the service provider and method of money transfer you choose. However, you should have all the above information ready whenever you send money to Nigeria.
According to the World Bank’s Migration and Remittances Data, Nigerians in the diaspora remitted a total of US $25.1 billion in 2018. Compared to the 2017 remittance this is a 14% increase. The United Kingdom and the United States account for over half of these remittances.
This comprises money used to pay school fees and cater for related costs. The money sent home could be saved up or given directly to the institutions or siblings who can then withdraw and pay for the education.
Deposited in financial institutions for future use or investment. A lot of immigrants from Nigeria are looking to save for assets back home. These may include land or housing.
A large portion of money sent back to Nigeria is for the healthcare of the loved once. This includes paying for medical costs for ageing parents and young siblings giving a piece of mind to the sender and the family abroad.
This is where the lion's share of remittances goes. Families use the money sent to buy food items. Sometimes money is sent back home for social support. Social support helps to lift the status and profile of immigrants. Senders designate some of the funds they send to support marriage, funerals and donations.
This depends on the instructions given. Part of the money sent by immigrants could be used to repair existing buildings or to put up new housing units for the family or the immigrant.
The money sent to Nigeria can may be used to buy shares, bonds, land and other investments assessed based on potential returns. This provides extra income for the families of the sender.
These could be loans taken to facilitate the relocation of or loans that family members took for other uses.
Immigrants from Nigeria may help fund startups or support existing businesses, boosting cash flows to keep them afloat.
The use of the money as specified by those sending may not necessarily be the actual use by the households. Beneficiaries may alter the usage of funds to suit their immediate and most pressing needs.
Whether you are making regular transfers or simply a one-off, money transfer services can be of great value. They are cheap, fast, and secure.
Many of the transfer services have different options for sending money. These methods ensure convenience and inclusion for beneficiaries in far removed areas from formal banking institutions. Below are the specific benefits of money transfer services.
It is possible to send money from any country to Nigeria. However, there are factors to consider are such as the parallel exchange rates in Nigeria, alternative investment opportunities, actual end use of the amounts remitted, location of beneficiaries and speed of transfer.
Other factors to consider include the location of the recipient and the speed of transfer. If the beneficiary is in rural areas with no mainstream banking services, you would be better off using cash pickup or mobile wallet transfer methods. If you are sending money home for emergencies, you need a guarantee of faster delivery. Azimo, Xendpay and Ria can give you under 30 minutes transfers.
During this time of economic shocks and instabilities, you need to be extra cautious when sending money to your loved ones in Nigeria. Check out the various sending options, prepare in advance the information you need to provide, analyze the various benefits offered by the different providers and lastly consider the factors back at home before sending. This will guarantee you value for money and peace of mind.
The current exchange rate for American Dollars (USD) to Nigerian Naira (NGN) is 1 USD for approximately 359.9999 NGN. The high for the last 90 days was 363.8296 NGN per USD, while the low was 306.4496 NGN for every USD with the average of 360.7568 NGN per USD in the last 3 months.
The volatility was 0.23%, so exchange rates should remain relatively constant, barring unforeseen circumstances.