Novacrust: FX costs eroding earnings for Africa’s remote workers

Financial technology company Novacrust has raised concerns over the high cost of charges that remote workers and digital professionals across Africa incur when receiving salaries and wages in foreign currencies.

Novacrust noted that while Africa’s remote workforce is expanding, many digital professionals still struggle to access financial services designed to meet their cross-border earning needs.

The company raised the concerns in a statement on Sunday, arguing that remote workers frequently lose significant portions of their earnings to high foreign exchange spreads, intermediary charges and withdrawal fees imposed by both traditional banks and legacy fintech platforms.

What Novacrust is saying

The company said the problem extends beyond banks to fintech platforms that obscure their costs in exchange rates rather than charging transparent fees.

• “Traditional banks in Nigeria and across the continent are still charging fees that feel like they were designed to punish cross-border transactions; high FX spreads, intermediary charges, and withdrawal fees that eat into whatever you earn,” the company said.
• “Most legacy fintech platforms aren’t much better; they just hide the cost in the exchange rates,” it added.

Novacrust said the problem is particularly acute for professionals earning in foreign currencies such as dollars, pounds and euros while living and spending in local currencies such as naira, cedis, kwacha or shillings.

• “The digital professional who earns in dollars and lives in naira, cedis, kwacha, shillings, or other local currencies is already plugged into the global economy; the gap is on the financial infrastructure side,” the company said.

More insights

Novacrust said the problem is growing in scale as Africa’s gig economy expands rapidly across multiple markets, with professionals in Nigeria, Ghana, Rwanda, Malawi, Tanzania and Kenya increasingly earning in foreign currencies but lacking adequate financial infrastructure to receive and manage those earnings efficiently.

• The company explained that many remote workers in Africa remain underserved by existing financial institutions despite the continent’s digital workforce expanding at a fast pace.
• This creates a structural gap between the global earning opportunities now available to African professionals and the local financial tools available to manage those earnings.

What you should know

The cross-border payment problem Novacrust is highlighting is not new, but it has grown more acute as the volume of African professionals working remotely for foreign employers has surged in the years since the COVID-19 pandemic normalised remote work globally.

This growing demand for more efficient cross-border payment solutions has also drawn attention from policymakers.

• In June, Nairametrics reported that the Federal Government proposed the creation of a cross-border payment card that would enable transactions between African currencies without first converting them into the U.S. dollar or other intermediary currencies.

The proposal was made by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a meeting with a delegation from Mastercard in Abuja.

He said such a payment system would strengthen intra-African trade by reducing the cost and complexity of cross-border transactions under the African Continental Free Trade Area (AfCFTA).

At present, most cross-border card payments within Africa are processed through intermediary currencies, particularly the U.S. dollar, resulting in multiple currency conversions and higher transaction costs.