David Ajala, CEO of Africhange, a cross-border payment platform, shares insights on the challenges African immigrants face with remittances and the impact of the naira’s volatility.
Africhange’s Mission
Africhange was founded to solve the high-cost remittance issue that African immigrants face. After moving to Canada in 2010, Ajala witnessed firsthand the financial pressure of supporting families while settling into a new country. In 2020, Africhange launched to offer affordable, transparent remittance services, helping immigrants send money home without hefty fees.
Expansion and Growth
Africhange operates in Canada, Nigeria, Australia, and the UK, with plans to expand further. Recently, it received an IMTO license from the Central Bank of Nigeria, enabling direct remittance handling into Nigeria, reducing costs and improving transaction speeds.
Challenges in Sending Money Home
Nigerians face high remittance fees, delayed transfers, and fraud. Africhange aims to address these issues by offering a cost-effective and reliable service for seamless remittances.
Nigeria’s Remittance Dominance
Nigeria ranks among the world’s top 10 remittance recipients. The growing diaspora, especially in the U.S., sends vital funds home, contributing to family support and investments in businesses, real estate, and agriculture.
Impact of Naira Volatility
The weakening naira has led to an increase in remittance volumes as Nigerians abroad benefit from favorable exchange rates. While this helps support families, it highlights the economic instability caused by currency fluctuations.
Floating the Naira: A Risky Move
Ajala views the naira’s floating as a necessary but risky step. While it may improve forex access and investment, it could lead to inflation and market instability in the short term. The key to success lies in addressing Nigeria’s deeper structural issues.
Forex Challenges and Solutions
Nigeria’s reliance on oil exports causes forex instability. Diversification into sectors like agriculture, manufacturing, and technology, alongside attracting foreign investment, could stabilize the economy. Additionally, improving oil production efficiency could help boost revenue.
Intra-African Payments
Intra-African payments are hindered by complex currency systems and regulations. Initiatives like the Pan-African Payment and Settlement System (PAPSS) aim to streamline payments, enabling faster, cheaper cross-border transactions between African nations.
Africhange’s Future Plans
Africhange is preparing for a funding round in early 2025 and plans to expand into the U.S. and EU markets, enhancing its global payment capabilities.
The Future of Nigeria’s Remittance Landscape
Nigeria’s remittance landscape is evolving, with regulatory changes, digital platforms, and growing migration patterns. New payment solutions, such as PAPSS and stablecoins, will drive down costs and simplify remittances. As Nigeria’s infrastructure improves, sending money home will become faster, cheaper, and more efficient.
