Floating of naira a risky move – Africhange CEO, Ajala
Chief Executive of Africhange, a platform that cross-border payments, David Ajala, tells FELIX OLOYEDE about some of the challenges Africans in the diaspora face sending money home
Can you tell me more about the story behind Africhange and the problems it set out to solve?
When I started Africhange, I wasn’t just trying to build a remittance company. I just wanted to solve a problem I, myself, had lived through. I arrived in Canada in 2010, after years of trying to emigrate, and I came with little money and no idea where I’d stay that first night. I got through those early days on the kindness of strangers, other African immigrants who knew exactly what I was going through. A Sierra Leonean woman I met on the bus gave me a place to sleep that first night and eventually helped me find my next job. Members of my local African church chipped in donations so I could eat while I was in school. I saw firsthand how the African community looked after its own, and it made me realise that immigrants rely not only on their resilience but on the strength of these informal networks.
But over time, I noticed how much financial pressure immigrants face. Many of us come with almost nothing, and while we’re trying to establish ourselves, we’re often also supporting families back home. These aren’t luxuries we’re sending back; it’s money for rent, medical bills, and school fees. And for immigrants, every dollar counts. But existing remittance services were charging fees that chipped away at those dollars or pounds—money that people’s families depended on. I kept thinking about the community support I’d received, and I thought, “What if I could create a service that not only kept remittance fees low but was built with the same sense of community that had helped me?”
That’s where Africhange started. I launched it in 2020 in Canada, to help African immigrants send money home without getting gouged by high fees. We built Africhange with the immigrant experience in mind. From day one, we focused on keeping our rates affordable and transparent. Our goal wasn’t to make money off each transaction but to give immigrants a way to support their families without unnecessary costs weighing them down.
Today, Africhange is in Canada, Nigeria, Australia and The United Kingdom but our vision is global. The immigrant journey isn’t unique to any one country, and neither are the challenges. We’re planning to expand to the U.S. and EU very soon because wherever immigrants are, we want to be there, helping them keep their connections back home strong.
Africhange has just acquired an IMTO licence from the CBN. What does this mean?
With our new IMTO license, we are now able to handle remittances directly into Nigeria without going through intermediary partners. Cutting out the middlemen might sound simple, but it’s a big shift. Now, we can partner directly with local banks, which means fewer steps in the settlement process, lower costs of processing, and faster service for our customers. For Nigerians, this means better rates and more value in every transaction. And while we’re moving quickly, we’re also keeping a close eye on compliance—making sure everything’s secure and well regulated. This licence lets us build a better remittance experience that gives people more value for their money, every step of the way.
What specific challenges do Nigerians face in receiving or sending remittances?
Regulations force people into using channels that skim off value with high rates. Fees are absurdly high, making it painful to send small amounts, and delays are routine thanks to unreliable infrastructure. On top of it all, fraud is rampant, and inflation eats away at whatever is left. It’s a mess that traps money in inefficiencies and makes it harder for the people who need it most.
All the problems we’ve talked about are the kind of things a good product should solve and that’s what we are doing with Africhange.
Nigeria ranks among the top 10 countries worldwide for diaspora remittances. In your view, what factors contribute to this?
Nigeria’s position as a top remittance recipient feels almost inevitable when you look at the factors driving it. Millions of Nigerians live abroad—close to 1.7 million in the U.S. alone—and many send money home regularly, supporting family or funding education, healthcare, or housing. Last year, remittances into Nigeria hit $20bn, around four per cent of the country’s GDP. But it is not just family support; it is also a form of investment. Nigerians in the diaspora are sending money not only to help their families survive but to help their communities thrive. A good portion of remittances are going into property, tech startups, and small businesses, especially in sectors like real estate and agriculture where returns are promising in a young, growing economy.
And it is not just happening in isolation—the technology shift in remittances plays a big role. New digital platforms have cut costs and sped up the process, making it easier and more affordable for people to send money directly home. With inflation on the rise and job opportunities still limited for many, these remittances are more than just family support; they are lifelines that provide immediate relief while also fuelling long-term economic resilience and opportunity.
Given the current currency volatility, have you noticed any impact on the flow and volume of remittances?
As the naira weakens, more people are sending money back to Nigeria to take advantage of the favourable exchange rate. The weaker naira makes it more attractive for Nigerians abroad to remit funds, as their foreign currency (such as the Canadian dollar or Great British Pound) holds more value when converted into naira. This increase in remittance volume not only provides crucial financial support for families but also contributes to strengthening Nigeria’s foreign exchange inflows.
What are your thoughts on the floating of the naira?
Floating the naira is a big, risky move. For years, Nigeria’s exchange rate has been artificially set, and it created all sorts of distortions. Businesses struggled to get access to dollars, and people had to find creative (often expensive) ways to get their hands on foreign currency. By floating the naira, the idea is to let the market decide its value, which could improve things like forex access, investment, and transparency.
In the short term, this is going to be messy. The naira will lose value before it finds its equilibrium. Currency fluctuations could get wild, and inflation might spike as the cost of imported goods rises. That is not exactly a recipe for stability, and people will feel it—in fact, it is all playing out already.
The key to this working in the long run is what comes next. If Nigeria can fix some of its deeper structural issues—like oil production inefficiencies, a reliance on foreign currencies, and an underdeveloped manufacturing sector—then floating the naira could be a good thing. But if the government just sits back and lets the naira float without addressing these issues, the move could backfire.
So, while floating the naira might seem like a bold step forward, it is really just the beginning. The real question is whether Nigeria can create the conditions that make this painful transition worth it in the long term. The promise of a more market-driven, competitive economy is real, but only if the country can stabilise the ship after it starts rocking.
How do you think Nigeria can address its forex challenges?
Nigeria’s forex challenges stem from a simple but deep-rooted problem—it is not producing enough of what the rest of the world wants. More than 80 per cent of Nigeria’s foreign exchange inflows come from oil exports, which is a risky dependency. When oil prices fall, as they did recently, the whole economy feels the pinch. In a way, Nigeria’s economy is like a tech startup with only one major customer. It’s profitable when that customer is spending, but if they stop, the business has no backup.
The most straightforward way to fix this would be diversification. If Nigeria produced other things that the world wanted—more agricultural exports, manufactured goods, or even tech services—the economy wouldn’t be held hostage by the price of oil. This would take time, though, because building new industries and export channels isn’t something that happens overnight. It’s like trying to grow new branches on a tree that’s always been pruned a certain way.
Nigeria has another option: attracting foreign investment. Recent efforts by the government have focused on reforms to make the economy more accessible for foreign investors. However, investors need stability and predictability. Imagine you are an investor with $10m. You’re looking for places to invest, but every time you glance at Nigeria, you see exchange rate fluctuations and shifting regulations. You’d probably think twice before investing in such a climate, and that is what’s happening. The reforms are a step in the right direction, but they need time and consistency to work.
Then there is the quicker fix—foreign loans. Nigeria has explored partnerships with countries that have plenty of forex to spare, like the Gulf states. These partnerships, if successful, could bring in much-needed liquidity to the forex market. But loans are only a temporary fix, like taking on a big credit card balance to cover expenses. Eventually, they have to be paid back, often with interest, which means the problem is only postponed, not solved.
Finally, Nigeria could try to solve part of the problem by maximising its oil and gas production. The issue isn’t just global prices—it’s also about efficiency. Oil theft, outdated infrastructure, and lack of transparency have all eaten into Nigeria’s revenue from oil. Fixing these would be like closing the leaks in a revenue pipeline that’s already in place. The way forward probably isn’t any one of these options alone, but a combination.
Intra-African payment is still a major issue. How can the continent solve this challenge?
The problem with intra-African payments is that they’re way harder than they should be. When a business in Nigeria tries to pay a supplier in Kenya, it can’t just send money directly in local currency. It typically has to go through a third-party currency—often dollars or euros—handled by intermediaries, and each step of the process adds cost, time, and complexity. That is a bottleneck, and it slows everything down.
At its core, the issue is fragmentation. African countries use different currencies, different banking systems, and different regulations. These systems aren’t set up to communicate, and the result is a payment infrastructure that is practically designed to discourage trade between African nations. This lack of a unified framework is holding the continent back.
There is a solution, though. It starts with creating an integrated system for payments that doesn’t rely on dollars or euros. The Pan-African Payment and Settlement System is a promising first step in this direction. PAPSS allows direct settlement in local currencies. A Nigerian company could pay a Ghanaian one directly in their respective currencies, with PAPSS handling the exchange. It is not just faster; it removes the dependency on outside currencies, giving African economies more autonomy over their transactions.
Of course, just having the infrastructure isn’t enough. For PAPSS to work, it needs adoption. That means getting every central bank and financial institution in Africa to connect to it and making it part of the standard banking systems in each country.
In the long run, the goal should be to create a network for African payments that’s so seamless it doesn’t feel like cross-border trade at all. When it’s easier for a Kenyan to buy goods from Nigeria than from Europe, we’ll know we’re there. That change would open up vast new trade possibilities across Africa, unlocking economic potential on a scale that’s hard to imagine right now.
What are Africhange’s plans in the coming months?
We are gearing up for a funding round in early 2025 to fuel growth and build out our product. Right now, we are in the final stages of moving into the U.S. and EU markets. It is a big step—expanding there opens up access to more customers and strengthens our cross-border payment capabilities. The timing feels right; we’ve got the momentum and a clear path to make an even bigger impact.
How do you see the Nigerian remittance landscape evolving in the next few years?
The future of Nigeria’s remittance landscape feels like watching the next phase of tech evolution unfolds, but in a space that is traditionally been painfully slow to change. The forces at play—regulation, tech innovation, and market demand—are all converging in a way that could completely reshape how money moves into Nigeria.
First, there is the regulatory angle. Recent policy shifts by the Central Bank of Nigeria show signs of adaptation. The CBN has been encouraging more official channels for remittance inflows, even allowing international money transfer operators to access Nigeria’s official FX window. This is a small change with potentially big consequences, as it might stabilise exchange rates in ways that benefit both the sender and recipient. But it’s a balancing act. On one hand, more official routes could help make remittances more transparent, while on the other, Nigerians are used to finding alternative pathways that work, even if they’re informal.
Now, here is where it gets interesting—the technology. There is a strong push for digital solutions in the remittance space, where mobile wallets and fintech apps are starting to outshine traditional methods. These innovations could cut fees, something crucial when average costs are still around 6-8 per cent per transaction. We are likely to see more competition from new players, and with competition comes efficiency. It’s reminiscent of how startups in the early 2000s disrupted older, less efficient industries—except here, the goal is to make it easier for people to send small but vital amounts of money home. With rising digital adoption, stablecoins could become a popular remittance option, especially if supportive regulatory frameworks emerge, enhancing control in Nigeria’s remittance ecosystem.
The big idea on the horizon is the concept of regulatory harmonisation across Africa, spearheaded by initiatives like the PAPSS. It’s one of those infrastructural improvements that people will barely notice but could unlock a lot of value. In a way, it’s like what the MainOne’s internet did for data flow—making it possible for information to cross borders without as much overhead or restriction.
Lastly, migration has an impact. With more Nigerians moving to the UK, US, and other countries, remittance flows will likely grow. Recent visa data shows more Nigerians working abroad, which means more money being sent home. This sustained volume could mean more pressure on Nigeria to keep up with global standards in remittance infrastructure—think better exchange rates, more efficient transactions, and lower fees.
All in all, Nigeria’s remittance landscape could look very different a few years from now. If regulation, tech innovation, and migration trends align, we might see a system where sending money to Nigeria is faster, cheaper, and more integrated with the broader African economy.
