For many of us, sending money to Nigeria is a routine affair. Every month, we go to the same money transfer agent and send money to our family back home, wondering what the exchange rate will be this time. While it’s true that, until recently, we didn’t have much choice to decide which provider to use, some new players have emerged in the recent years (mostly online money transfer operators) These providers offer much better rates and lower fees!
With the currency instability of the Naira, it is more important now than ever to compare all your options before deciding which provider to use for your next money transfer to Nigeria. There is a huge saving potential: if each one of us were to use the cheapest solution available, we calculated that we could collectively save $600 million US dollars every year.
So don’t wait and use the form above now to compare your options or read the reviews of the best rated providers below.
There is now some intense competition on the money transfer market to Nigeria. On Monito, we compare almost 30 different providers which enable you to send money to Nigeria. However, only a few of the most innovative and cheapest providers are available on this corridor.
If you’re sending money to a bank account, making a bank transfer from your bank account to a bank account in Nigeria is generally a very bad idea. The fees for international transfers varies from bank to bank but are generally quite high, and you could be hit with unknown intermediary and receiving bank fees. In addition to these fees, you’ll pay even more as the banks take a big margin on the exchange rate. Banks will also generally not use the unofficial parallel market rate for your transfer, but rather use the Central Bank of Nigeria’s terrible exchange rate which is pegged to the US dollar (see more on this here). Alternatively, you can use online money transfer providers such as Azimo, Lycaremit, WorldRemit or Transfast. They offer much better exchange rates and totally transparent pricing.
Sending money to be received in cash in Nigeria is often a necessity, but it is usually more expensive that sending money to a bank account. Traditional players such as Western Union or MoneyGram have the advantage of having a very wide agent network (there are more than 2700 Western Union agent locations in Nigeria), which means you can send money in cash to just about anywhere in Nigeria, from Lagos to Abuja but also in very remote areas. Transfast also have 700 agent locations in the country, and Ria is often a good option to consider as well, especially when sending from the US. Sending money online with traditional players such as Western Union will still be less expensive that sending money offline at an agent location, and you will still be able to benefit from their large agent network.
New actors such as Azimo and WorldRemit are not offering cash pick-up as a payout option in Nigeria for the moment, but this might change again in the future. However, they offer interesting options to send money to the mobile wallets of most Nigerian telecom providers (Airtel, Etisalat, GLO, MTN and Visafone), which is a good option to send small amounts of money.
If on the contrary, you need to send a large sum of money into Nigeria, you will find a better service by using foreign exchange companies such as OFX, World First or The FX Firm, although they only offer to send USD into Nigeria.
With the regulatory instability in the money transfer market, things can change quickly. New providers can suddenly start offering new services or abruptly stop offering them. Depending on whether they have access to the parallel market or not, the exchange rates they offer can differ widely, which is why it is very important to compare your options before each of your transfers. Stay tuned on our social channels to get the latest news about the Central Bank of Nigeria.
There are two exchange rates in Nigeria at the moment for all foreign currencies: the official rate that was pegged to the US dollar by the Central Bank of Nigeria (CBN) to prevent excessive devaluation of the national currency (this is the rate you can see on Google and most other websites), and the parallel market rate which is much higher (up to 40%).
If you want to learn more about the reasons behind these two exchange rates, you can read this post on our blog, but what is important is to make sure you are not getting the artificially low exchange rate decided by the CBN, but rather find a provider that is offering to change your money into Nairas at an exchange rate close to the parallel market rate.
Banks in Nigeria do not use the IBAN system which facilitates international transactions. All the banks in Nigeria use the NUBAN system, so the recipient of your transfer in Nigeria should be able to communicate his NUBAN number, which you will need to set up the transfer. They should also provide the name of the bank and their full name.
While in most cases, money transfer providers make it easy by providing a list of banks from which you can select your recipient’s bank, in some cases, you might need to find the SWIFT/BIC code of the bank by yourself. This bank code website can be very useful in these cases.
There are over twenty commercial banks in Nigeria (the biggest are listed on the left), including branches of international banks such as Barclays or Deutsche Bank. In general, money transfer providers we compare and review on Monito are able to send money to most of the banks in Nigeria, but their list of partners don’t always cover all banks. You therefore might want to check the list of banks supported by a given provider before signing up.
It is estimated that around 5 million Nigerians are living outside Nigeria, of which approximately half are living in other sub-Saharan African countries. Outside Africa, the largest communities of Nigerians can be found in the United Kingdom (Peckham, one neighbourhood of London, is sometimes called “Little Lagos”) and the United States (with Houston, Texas as the center of the Nigerian diaspora in the US).
While the emigration of many educated people out of Nigeria constitutes a “brain drain” issue whose negative effect on Nigeria’s development is hard to measure, the large amounts of money that Nigerian abroads send back to their home country has an important positive impact on the country’s economy. Estimations from the World Bank put the total amount of remittances sent to Nigeria at over $20 billion US dollars, and it is believed that almost 3 million Nigerians receive money from overseas every year. This makes Nigeria the 6th largest recipient of remittances in the world.
A study from The Economist suggest that an important proportion of the younger generation of Nigerians who achieve a higher education in universities abroad return to Lagos after a while, often with the goal of starting a business.