If you send money home to Nigeria, you are definitely not alone. Every day thousands or potentially millions of people send money to Nigeria. Surprisingly, it’s not just the direct recipients who benefit from these funds. When people send money, Nigeria also benefits.
Remittances Effect on GDP
Throughout Africa, global remittances (money sent into the country from abroad) make up a large portion of many countries’ gross domestic product. There are 19 countries where global remittances make up 3% of the GDP, six countries where remittances account for 10% of GDP, and an additional handful of countries where global remittances have an even bigger impact on the economy. In fact, in Liberia, remittances account for almost a third of the country’s GDP.
When You Send Money, Nigeria Benefits
When global remittances are such a huge part of a country’s GDP, they become a critical part of that country’s economy. If the remittances stopped, these countries would have a lot less money floating around.
To understand how the payments affect these countries, imagine what happens to the money once it gets sent. When someone receives money, they buy food, clothing, and other services. That boosts those industries.
In some cases, when you send money, Nigeria residents do even more with it. For example, someone might start a business, put up solar panels, dig a well, or make other moves that benefit their local economy. Those effects spread throughout the country and help improve its economy as a whole. That applies to Nigeria as well as the rest of Sub Saharan Africa.
Cost of Sending Money
Unfortunately, sending money to Nigeria or anywhere else in the world is not free. Currently, people pay an average of 7% for global transfers. That means they pay about $7 for every $100 they send.
According to world leaders, this is not a sustainable amount. Rather, if the cost was 3%, that would be considered sustainable. African and European leaders want to hit this target by 2030, but due to competition and the rise of fintech companies who offer low-cost online transfers to send money to Nigeria, it’s likely that this goal will be hit long before that.
Currently, the largest players in the global remittance market are traditional money transfer companies such as Western Union, MoneyGram, and RIA. Unfortunately, these companies tend to charge more than the 7% average. However, people who use electronic services such as Ping Express pay much lower fees while also enjoying faster service.
Global remittances have increased by 51% between 2007 and 2016. That isn’t just because people are sending money home more frequently. It’s also because it’s now easier to send and receive funds.
In the past, recipients needed to have a bank account to receive funds or they needed to travel long distances to pick up money in an office. With the rise of electronic and online remittances, you can now send money easily over the internet or using your phone, and your family can receive the funds in a digital wallet or even just get minutes added to their phones.
To learn more or to start a transfer, try Ping Express. To make it even easier, download the app to your phone. Then, you can send money to Nigeria.