By 2028, the market valuations of Western Union, and whatever is left of MoneyGram, in any form, will be half of what they are today. Also, remittance companies doing business in/into Africa which do not prioritize the use of stablecoin will see massive erosion of value. I expect most African economies to enable comparable local stablecoins which will get integrated into global exchanges, and exchangeable with local fiat, and once that happens, remittance 3.0 will begin.

Remittance business has been built on two core costs: transaction and distribution costs. The originating transaction cost has since dropped from $36 per every $200, to now $5 per every $200. Some ecosystems have even removed transaction costs focusing on currency arbitrage which goes well below 2%. 

But that 2% will go by 2027 as local stablecoins evolve to sync with current global ones like USDT, USDC and BUSD.  When that happens, your typical remittance companies will fade as most will be disintermediated. The distribution cost is a non-factor these days since you can pay from anywhere into local bank accounts, distorting the old fees paid to gatekeepers in the banking sector.

The future posits an era where frictions will disappear in remittance, and the winners of this sector in Africa will be pioneers of stablecoins. If you are looking for a startup idea, I just shared one.  Of course you need to have liquidity and reserves to ensure your stablecoin is in sync with fiat all the time, and that means, you need big pockets to execute this.

Nigeria Naira’s Stablecoin and Urgency for Global Integration with Fintech and Remittance Firms

TikTok has announced its readiness to shut down for U.S. users on January 19, but there may be a last-minute reprieve for the embattled app. A Biden administration official told ABC News that it does not plan to enforce the law that would require TikTok to cease operations one day before President Joe Biden leaves office.

TikTok could still choose to shut down voluntarily on Sunday, a move aimed at highlighting the potentially wide-ranging impact of the ban on its 170 million U.S. monthly users. However, Biden’s team is signaling that the issue will likely be passed on to the incoming Trump administration to address.

“Our position on this has been clear: TikTok should continue to operate under American ownership. Given the timing of when [the ban] goes into effect over a holiday weekend a day before inauguration, it will be up to the next administration to implement,” a White House official said in a statement.

The law does not explicitly mandate TikTok to go dark on January 19. Instead, app stores and internet hosting services providing support to TikTok could face fines of up to $5,000 per user. With the app’s massive user base, this could amount to billions of dollars in liability for companies like Apple, Google, and Oracle.

So far, these tech giants have either declined to comment or remained silent on how they plan to handle the looming deadline.

Even if the president-elect or outgoing president wanted to delay the ban, their options are limited. The law allows for a one-time, 90-day extension under stringent conditions: TikTok must demonstrate it is on a clear path toward divesting from ByteDance, there must be evidence of significant progress, and legally binding agreements must seal that progress. There is no indication that these conditions have been met.

Congress Divided Over Extension

Efforts to delay the ban through legislative action have stalled. A group of Senate Democrats introduced a bill this week to give TikTok’s parent company ByteDance an additional 270 days to divest, but it was blocked by Republican Senator Tom Cotton, who cited national security concerns.

“It’s clear that more time is needed,” Senate Minority Leader Chuck Schumer said on the Senate floor. He emphasized the need for a solution that protects TikTok’s users and safeguards against potential Chinese surveillance. Schumer also revealed that he had directly appealed to Biden to grant an extension.

Despite bipartisan calls for a delay, the path forward remains murky. Cotton’s opposition underscores a growing divide between lawmakers, with some prioritizing national security over the app’s cultural and economic impact.

Reprieve From Trump’s Soft Stance?

As the deadline approaches, President-elect Donald Trump has softened his position on TikTok, raising the possibility of a reprieve. Once a staunch advocate of banning the app during his first term, Trump has shifted his tone, crediting TikTok for helping him connect with younger voters during the 2024 presidential campaign.

In a December news conference, Trump acknowledged having a “warm spot” for TikTok and hinted at a negotiated resolution to keep the app operational. He even met with TikTok CEO Shou Chew at his Mar-a-Lago resort in Florida last month to explore potential solutions.

Florida Representative Mike Waltz, Trump’s pick for national security adviser, revealed in a Fox News interview that the president-elect is considering options to preserve the app while addressing security concerns. These options reportedly include an executive order to delay enforcement of the ban, allowing time for negotiations with ByteDance.

“President Trump has been very clear: Number one, TikTok is a great platform that many Americans use and has been great for his campaign and getting his message out. But number two, he’s going to protect their data,” Waltz said.

Meanwhile, the Supreme Court appears poised to uphold the law that targets TikTok. During oral arguments last week, justices expressed concerns over national security threats posed by ByteDance’s alleged ties to the Chinese government.

Chief Justice John Roberts questioned TikTok’s legal team, asking, “Are we supposed to ignore the fact that the ultimate parent of TikTok is doing intelligence work?” While some justices raised concerns about free speech, the potential risks of the app seemed to take precedence.

If Biden chooses to defer enforcement of the ban, TikTok’s fate will rest in Trump’s hands. Given Trump’s recent softened stance and efforts to explore options for preserving the app, there is a chance the incoming administration could seek a solution to keep TikTok operational.

On Friday, Trump posted on Truth Social that he had a “very good” phone call with China’s President Xi Jinping, which included discussion of TikTok. In addition, the president-elect said that he would make a decision on TikTok in the “not too distant” future, but did not say what he would do.

“We discussed balancing trade, fentanyl, TikTok, and many other subjects,” Trump wrote on his social platform. “President Xi and I will do everything possible to make the world more peaceful and safe!”

The World Bank has projected an average economic growth rate of 3.6% for Nigeria between 2025 and 2026, citing the Federal Government’s ongoing reforms as a key driver of this positive outlook.

The projection, contained in the World Bank’s “Global Economic Prospects” report for January 2025, credits reforms such as the removal of fuel subsidies, unification of the foreign exchange rate, and controversial tax policies for boosting business confidence and driving economic recovery.

The report highlighted that Nigeria’s Gross Domestic Product (GDP) growth climbed to an estimated 3.3% in 2024, primarily fueled by the services sector, which saw significant activity in financial and telecommunication services. This marks a steady improvement in economic performance compared to the previous year.

The World Bank stated: “Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy. Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration.”

Inflation and Monetary Policy

The report underscored that inflation, a long-standing challenge in Nigeria, is expected to decline gradually following the Central Bank of Nigeria’s (CBN) tightening monetary policy in 2024. This decline is anticipated to boost consumption, which, alongside the robust services sector, will remain a significant driver of growth over the forecast period.

The World Bank further noted: “Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth.”

Regional Context: Sub-Saharan Africa Growth Projections

On a broader scale, the World Bank projected that growth in Sub-Saharan Africa (SSA) will firm to 4.1% in 2025 and 4.3% in 2026. The revision reflects improved economic conditions across various subgroups in the region, as financial conditions ease and inflationary pressures subside. Nearly half of the economies in SSA are expected to witness upgraded growth projections for 2025 and 2026.

Oil Production and Its Role in Economic Growth

While Nigeria’s economy is diversifying, oil production continues to play a critical role. The World Bank forecasted a marginal increase in oil production over the forecast period, although output is expected to remain below the Organization of the Petroleum Exporting Countries (OPEC) quota.

Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that daily average oil production rose to 1.486 million barrels per day (mbpd) in November 2024, marking an increase of 152,000 barrels compared to the previous month. However, production slightly declined to 1.667mbpd in December 2024, reflecting a 1.35% month-on-month decrease.

Cumulatively, oil output in December 2024 reached 51.69 million barrels, a marginal 1.9% increase compared to November’s 50.71 million barrels. Despite these gains, the World Bank emphasized that per capita income growth in Nigeria is expected to remain weak over the forecast horizon.

The World Bank attributed the improved economic outlook to several reforms introduced by the Federal Government, including:

• Removal of Fuel Subsidies: The elimination of subsidies reduced fiscal pressure, redirecting funds toward critical sectors of the economy.
• Tax Reforms: While some of the proposed tax bills have been controversial, they have contributed to a more structured revenue system.
• Exchange Rate Unification: This move eliminated the implicit foreign exchange subsidy, resulting in improved revenue collection and narrowing of the fiscal deficit.

The reforms have reportedly bolstered business confidence, with investors and industry players responding positively to the government’s efforts to create a more predictable economic environment.

However, the World Bank warned that Nigeria’s per capita income growth will likely remain weak, indicating that economic gains may not translate into significant improvements in living standards for a large portion of the population.

Additionally, the persistence of high inflation and ongoing structural challenges in key sectors such as energy and infrastructure could limit the full potential of these reforms.