The nine billion dollar tax on love

Here is a number to sit with. In 2024, roughly $104 billion flowed into Africa in remittances, according to the World Bank. That is almost twice what the continent received in overseas development assistance in the same year. It is money our people, scattered across Europe, the Gulf, North America, and increasingly across Africa itself, sent home to the families they left behind. School fees. Hospital bills. Mama’s medication. Brother’s matatu deposit. The wedding contribution. The funeral contribution. The thousand quiet acts of love that hold the African household together across an ocean.

Now here is the second number. The average cost of sending $200 to sub-Saharan Africa in the first quarter of 2025 was close to 9 per cent. The global average is 6.4 per cent. The United Nations Sustainable Development Goal, which African governments formally signed up to, is 3 per cent. Sub-Saharan Africa has the highest remittance costs of any region on earth and has held that unhappy distinction for over a decade. At current rates, Africa will not meet the SDG target by 2030. We will not even be close.

Roughly $9 billion is extracted from African families every year in fees and transferred to Western Union, MoneyGram, a handful of banks, and their shareholders

Do the arithmetic. If $104 billion flows in annually at an average cost of 9 per cent, roughly $9 billion is extracted from African families every year in fees. That is nine billion dollars, drained from grandmothers and unemployed cousins and the single parent trying to keep a child in school, and transferred to Western Union, MoneyGram, a handful of banks, and their shareholders.

It is a tax on love. It is the most regressive tax on the African continent, because it is paid disproportionately by the poor, and it is paid on money that was sent specifically because the poor were in need.

Some corridors are worse than others. Sending $500 between Tanzania and Uganda can cost 33 per cent on a bank-to-bank transfer. Stanbic Bank reportedly charged 42 per cent on one leg of that corridor. NBC Bank charged 47 per cent. Those are not typos. Nearly half of what the sender meant for his sister in Kampala stayed with the bank. The continent where banking costs the most is the continent where banking is least able to afford it.

Bitcoin on hundred dollars bills. Instagram – @bermixstudio | Free to use under the Unsplash License

Against this backdrop, Bitcoin has done something the policy community, development banks, and three decades of reform initiatives have failed to do. It has offered a live, functioning alternative that ordinary people can use. A Lightning Network transaction between Kenya and Zimbabwe settles in seconds, at a cost measured in cents rather than percentages, and requires no correspondent bank, no SWIFT message, and no permission from a regulatory regime in a former colonial capital. A Ugandan nurse in Dubai can send $200 home to Masaka, and her mother receives, within minutes, an amount so close to $200 that the difference is trivial. The traditional system’s business model, built on opacity and friction, simply collapses in the face of this.

The market has noticed. The Bank for International Settlements estimates that approximately $400 billion was settled through stable-coins and Bitcoin rails globally in 2025. Western Union itself, reading the signal, launched a pilot last year to integrate USDC into its remittance rails. Having spent decades building a business on the premise that moving money across borders must be slow and expensive, the company is now quietly admitting the premise no longer holds.

None of this is tidy. Bitcoin’s price fluctuates. Lightning custody requires technical literacy that is still uneven across the continent. Off-ramping from bitcoin into local currency to buy groceries still depends on peer-to-peer networks, mobile money integrations, and exchanges that can be shut down by governments at short notice. Regulatory hostility in countries like Nigeria has pushed much of the activity underground, which is a real cost. The honest position is not that Bitcoin has solved African remittances. It has not. What it has done is break the monopoly on what is possible.

For the first time in the modern history of African migration, the family sending money and the family receiving money have a choice. They can pay the nine per cent, or they can learn a new rail. That choice is a political act. Every naira, cedi, shilling, or rand that bypasses the Western Union counter and arrives through a Lightning wallet is a small vote for a different monetary future, one where our diaspora’s love is not taxed for the benefit of distant shareholders.

Nine billion dollars a year is a lot of money to stop losing. Let us stop losing it.

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