Money Transfer in Nigeria

Topics: Foreign exchange market, Nigeria, Bank Pages: 3 (860 words) Published: October 25, 2008
International Money Transfer in Nigeria (Kester Osahenye)

With an estimated 145 million inhabitants (Nigerian Population Census December 2006), Nigeria is unarguably the most populous country in Africa. Since the emergence of the nascent democracy, Nigeria now plays a pivotal role in African migrations. As Africa’s economic giant, Nigeria has also become increasingly involved in international migration to Europe, the US, the Gulf countries and South Africa. Yet Nigeria is a source and destination for country migration in Africa (South Africans, Togolese, Ghanaians, and Beninoise). Considering the key role Nigeria plays in African migration systems, its role as destination, transit and source country, and considering the fact that it is both confronted with the negative and positive dimensions of migration. Nigeria however ranked top amongst global remittances to home country. It scored 65% in the 2003 research by the UNDP on remittances by regions.

The long military incursion into politics, the hyper-inflationary trends, the devaluation of the Naira and exchange-rate fluctuations, with its twins indices of economic uncertainty that allowed foreign exchange bureaus (usually referred to as bureau de change) to undercut the official exchange rate, the road side merchants known as the ‘mallams money changer’ because they are dominated by hausa fulanis from the Northern parts of Nigeria, they hang around airports, Five Star Hotels and Night Clubs looking for expatriates or travelers who want to change foreign currencies. These activities contributed to the devaluations of the Naira in relative to ‘hard currencies’. Their competitive rates mean bureaus de changes were commonly used for foreign exchange transactions and anecdotal evidence suggested that they played key roles in informal remittance systems in recent past in Nigeria.

In 1993, Western Union Money Transfer (WUMT) was introduced by First Bank Nigerian Plc, which was targeted at...
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