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Worldremit generates over $200bn in revenue and manages more than $700bn of remittance FLOWS. Nigeria received 24B

As a youth, Ismail Ahmed was forced by the outbreak of civil war to escape his homeland – Somaliland – and take refuge in the UK. Today, the company he founded is one of the most successful money transfer companies in the world. Profile

At the end of August this year, WorldRemit, one of the leading players in the world of international money transfers, put in a reported $500m bid for the takeover of the US app-based remittance company Sendwave. Not bad going for a company that was founded only 10 years ago by a Somali entrepreneur, Ismail Ahmed.

Remittances today account for more than FDI or overseas development aid. The global market is estimated at $700bn a year. Nigeria alone received an estimated $24bn in remittances in 2018, up from $4bn in 2013.

Photo: The founder of worldremit ismail ahmed

Many economists predicted that the economic meltdown caused by Covid-19 would lead to a massive drop in remittances and as a result, adversely impact emerging markets. The World Bank, at the start of the pandemic in April, estimated a 20% fall in remittances, anticipating catastrophic consequences.

However, these predictions were confounded when some countries, such as Kenya, posted growing year-on-year remittance numbers as at August. Ahmed is not surprised by this. He says he couldn’t fathom the World Bank estimates as experience had shown him that remittances were generally countercyclical.

The rise in remittances, for example in countries like Kenya, has been attributed to a number of factors. One is that many of the people sending money back home are actually those ‘essential workers’ who have kept health facilities going, and provided the services that have kept the economies of the West afloat.

In addition, government stimuli had cushioned the economic blow and the different economic mitigation schemes have meant that in some countries, such as the US, disposable income at the end of the month has at times actually been higher than what many workers were earning before the pandemic.

Ahmed says that the figures for WorldRemit, as at October, were quite strong for the year. “The only region where there was a noticeable fall are the Gulf countries, especially with Indian workers sending money back home.”

Recalling his life story, he says it seems that he was destined to work in money transfer services. He was born and raised in what is now Somaliland and he reflects that his family often received monies from a relative working in the Gulf.

With an excellent head for figures, he was awarded a World Bank scholarship to study economics at the University of London in the UK. But before he could take up the offer, the Somali Civil War intervened.

In the chaos that followed, he managed to escape and thanks to the money sent to him by his brother working in Saudi Arabia, he was able to purchase an air ticket out of Djibouti to the UK.

Expertise in the world of remittances

Fascinated by the world of remittances, he wrote a research paper on the subject at Sussex University; and whilst at the London Business School, as part of a case study project, he put together a model of a remittance business. This was to become the blueprint for what is today WorldRemit.

Before setting up WorldRemit, Ismail worked at the UN to advise on the system of remittances after 9/11.

While working on a UN Development Programme for Somalia, out of Nairobi, he noticed fraud involving senior colleagues. He blew the whistle and, for this, was dismissed.

He fought his corner, alleging unfair dismissal. He won his case and substantial compensation. This was the seed money he used to launch WorldRemit together with Catherine Wines, who also had extensive experience in money transfers, having herself restructured a remittance business that was subsequently sold to Travelex.

He says the scope of their ambition right from the get-go was big – hence the name of the company. As a student, he had experienced the frustrations and high charges involved in sending money back home. Working at the UN, he had realised that the process could be expensive as well as far from frictionless.

Right from the outset, he says, he knew that using rapidly improving IT technology was going to be the ace in their pack. Properly deployed, it could challenge the two giants in the field – Western Union and Moneygram.

He sees WorldRemit as an aspect of the increasingly important fintech sphere. The runaway success of M-Pesa and mobile money in Kenya underscored to him, in the early 2000s, the enormous potential of digital.

However, breaking into the market wasn’t plain sailing. The dominant players had, in many cases, struck exclusivity deals with banks or agents and seemed unassailable.

Given the very tight space left in the market, WorldRemit started with a single agent in both Uganda and Kenya. But the company still managed to get considerable business. This proved to them that their business was viable and also that the market was growing apace.

It was not long before WorldRemit became a substantial global player. Today the company operates in over 6,500 money transfer corridors worldwide and sends money from 50 countries to more than 150 nations.

The acquisition of Sendwave will make it a company that generates over $200m in revenue and manages more than $7.5bn of remittance flows.

The deal will strengthen the company’s position in the US, the world’s biggest source of outward remittances. “You can’t be big in money transfers if you’re not big in the US,” says Ahmed.

Industry more streamlined

The remittance industry has definitely benefited from having more players in the market: costs have been drastically reduced and the spread on exchange rates has also fallen considerably. However, some analysts warn that it is becoming an increasingly difficult area in which to make money as competition is eroding margins and the marketing costs to acquire new customers are greater than the gains.

Ahmed doesn’t agree; he counters that the industry will not only grow but will evolve. One factor behind the resilience of remittances has been the digitisation of payments. “Somaliland is pretty much a cashless society today. In Kenya, 90% of remittances are non-cash based, with the majority going to mobile money. In Nigeria 90% of international money transfers will end up in a bank account. So even during lockdowns, remittance flows still take place.”

He believes that the digitisation of remittances will also enable countries and analysts to better understand and make use of data that is now more readily available.

He also anticipates that the infrastructure backbone of remittances, which is ultimately about matching and settling trades, can help play a greater role in business transactions such as purchasing machinery or goods from abroad, as well as in intra-African trade, where too often buyers need to access dollars or euros to settle a payment within Africa.

Remittances have often been overlooked as a development tool, he says, but today they are a key indicator from a macro-economic perspective. Nonetheless they have been criticised for being ‘unproductive’ capital in that they are used in the ‘receiving’ country to make basic purchases.

Ahmed refutes this and says that as well as covering expenses such as school fees, food or medical bills, a big chunk of remittance payments goes to starting new businesses, investing in land and property.

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Facebook reportedly had evidence that its algorithms were dividing people, but top executives killed or weakened proposed solutions

Facebook’s internal research found that it encouraged polarization, but Mark Zuckerberg and other top executives rejected ideas aimed at fixing the problem, The Wall Street Journal reported.

But Zuckerberg and Facebook’s policy chief, Joel Kaplan, repeatedly nixed proposed solutions because they feared appearing biased against conservatives or simply lost interest in solving the problem, The Journal reported.

Facebook had evidence that its algorithms encourage polarization and “exploit the human brain’s attraction to divisiveness,” but top executives including CEO Mark Zuckerberg killed or weakened proposed solutions, The Wall Street Journal reported on Tuesday.

The effort to better understand Facebook’s effect on users’ behavior was a response to the Cambridge Analytica scandal, and its internal researchers determined that, contrary to the company’s mission of connecting the world, its products were having the opposite effect, according to the newspaper.

One 2016 report found that “64% of all extremist group joins are due to our recommendation tools,” with most people joining at the suggestion of Facebook’s “Groups You Should Join” and “Discover” algorithms. “Our recommendation systems grow the problem,” the researchers said, according to The Journal.

The Journal reported that Facebook teams pitched multiple fixes, including limiting the spread of information from groups’ most hyperactive and hyperpartisan users, suggesting a wider variety of groups than users might normally encounter, and creating subgroups for heated debates to prevent them from derailing entire groups.https://tpc.googlesyndication.com/safeframe/1-0-37/html/container.html?n=0

But these proposals were often dismissed or significantly diluted by Zuckerberg and Facebook’s policy chief, Joel Kaplan, according to the newspaper, which reported that Zuckerberg eventually lost interest in trying to address the polarization problem and was concerned about the potential to limit user growth.

In response to the pitch about limiting the spread of hyperactive users’ posts, Zuckerberg agreed to a diluted version and asked the team to not bring something like that to him again, The Journal said.

The company’s researchers also determined that because of a larger presence of far-right accounts and pages publishing content on Facebook, any changes — including apolitical tweaks, like reducing clickbait — would have disproportionately affected conservatives.

That worried Kaplan, who previously halted a project called “Common Ground” that aimed to encourage healthier political discourse on the platform.null

Ultimately, many of the efforts weren’t incorporated into Facebook’s products, with managers telling employees in September 2018 that the company was pivoting “away from societal good to individual value,” according to The Journal.

“We’ve learned a lot since 2016 and are not the same company today,” a Facebook spokeswoman told the paper. “We’ve built a robust integrity team, strengthened our policies and practices to limit harmful content, and used research to understand our platform’s impact on society so we continue to improve.”

Facebook has repeatedly been scrutinized by critics who say the company hasn’t done enough to limit the spread of harmful content on its platform. That topic has come into sharper focus as coronavirus-related misinformation has run rampant on social media and as the 2020 presidential election approaches.

  • Author: Shakir Essa

Senegalese footballer hits back at Africans for making fun of his looks

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Krepin Diatta and his girlfriend

Senegalese footballer, Krepin Diatta, might not have been so popular until he scored that screamer of a goal for his side during their opening game against Tanzania at the ongoing Africa Cup of Nations games in Egypt. But, that is not what has been of grave concern to him since then.

After images and videos of the player started going around on social media, many poured onto the internet to troll his looks, teasing him even further after it was discovered that the midfielder, who plays for the Belgian side, Club Brugge KV, had an even “better-looking” girlfriend.
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Completely surprised and disappointed at the comments he has been receiving about his looks especially from fellow Africans, the player has hit back terming them as “racist” comments.

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The matter escalated after a tweet by an African model named Nora Pinging put the 20-year-old player in a position of discrimination after she called him a ‘frog’ and went on to state that she would never agree to marry him even if she was given 50 million dollars.
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@Headking_
Replying to @nora_pinging
Even if I’m given 50 Million Naira, I can’t marry ceramics.

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Naturally displeased with her tweet which she has since deleted, fans of the footballer poured onto her page to hit back at her while calling into question her reasons for thinking that the player did not deserve a ‘pretty’ lady as a girlfriend.

Former Chelsea star and Ivorian football legend, Didier Drogba, in response to the critics, encouraged him to instead be strong and focus his attention from all the negative reviews because “you are very talented.”

Senegal have a game more to play at the AFCON to decide whether or not they will make it to the last 16 stage after they lost their game against Algeria on June 27, 2019.

Press of africa

Digital media publisher
Shakir Essa