‘Black tax’: Africans continue to pay the cost of still-rising inequality

At some point in Trevor Noah’s Born a Crime: Stories From a South African Childhood, the author mentioned a term connoting an experience which the average African will have no problem immensely relating to—the idea of not truly being able to live your life until everyone around you has been brought up to the stage of not having to fear for survival.

“My mother calls it ‘the black tax’,” he wrote. “Because the generations who came before you have been pillaged, rather than being free to use your skills and education to move forward, you lose everything just trying to bring everyone behind you back up from zero.”

The money sent to home countries from Africans living abroad, also called remittances, are often the financial lifeline sustaining many African families, benefiting some 120 million people across Africa. The World Bank, in April said that Nigerians living abroad sent home $22 billion in 2017, the highest in the Sub-Saharan region followed by Senegal and Ghana, and the fifth highest in the world. This represents 10 percent increase when compared to the $19.64 billion sent home in 2016. Despite a history of pillages of both humans and resources in the form of slavery and colonialism, and the promise of foreign aid and leaders of all kinds seeking their own benefit, it is Africans themselves who continue to seek better lives to change the living circumstances of families and communities. 

Global migration is growing at an unprecedented rate alongside international money transfers from countries like the United States and the United Kingdom which are by far the most lucrative destinations for Nigerian migrants. However, due to Africa being seen as number one in terms of migration, some European countries have raised barriers, thus making it more difficult for Africans to get visas. This often leads to situations where Africans, with the added restriction of not being able to travel freely compared to global counterparts, are at a disadvantage in terms of effort put into sustaining a livelihood. The burden of the ‘black tax’ thus causes financial distress to middle-class professionals as they usually have no savings left after having to share their salaries with the entire family.

Money to family members from relatives outside the country outpaces international assistance from donor countries, and is the largest international flow of financial resources to Africa. It is a key foreign exchange earner, and significantly impacts household spending and emergencies especially in very difficult economic circumstances. 

But even sending funds home is not cheap, and statistics about how much money flows into the continent is often inaccurate. With costs nearly 30 percent higher than the global average, African diasporans in particular pay more to send money home compared to Diaspora groups in other regions of the world, a situation which creates informal undocumented channels that sometimes become the preferred option. South Africa, Tanzania, and Ghana are the most expensive sending countries in Africa, with fees averaging 20.7 percent, 19.7 percent, and 19.0 percent respectively. In comparison, it costs just 0.6 percent to send the same amount of money from Saudi Arabia to Nepal and 3.1 percent from the United Arab Emirate to anywhere in the world. This is what economists call a “super tax”, where the sender pays exorbitantly high fees, reducing the actual amount of funds transferred. It is this notion that African Americans in the U.S. also termed the “black tax” — the situation where they pay twice the amount or are refused better deals based on the colour of their skin.

Diaspora remittance funds have been seen to be more efficiently deployed for the development of the African continent. The funds are less likely to be misspent as compared to the misappropriations in the foreign aid industry and as such, are better focused on building the family and hence the nation since these monies go directly to paying school fees, building houses, and growing businesses. Yet, the majority of Africans remain increasingly restricted both in business and personal dealings which by default places them steps lower on the global ladder. The increase in mobile money platforms has seen increased competition among money transfer operators which will help to drive down the high remittances fees to African countries. With the deconstruction of walls and barriers which limit Africans from travelling and connecting with ease globally, hopefully—in good time—the concept of the ‘black tax’ will completely be erased as well.