Britain's leading money transfer companies are imposing a "super tax" on remittances to Africa and should be investigated by the government's consumer watchdog, the UK's leading international development thinktank said on Wednesday.

The Overseas Development Institute called on the Financial Conduct Authority to look into Western Union and Moneygram as it issued a report which said Africa was losing $1.8bn a year from excessive charges on money sent home by workers in the rest of the world.

Latest World Bank figures show that remittances from foreign workers are expected to be $436bn this year, more than three times what poor countries receive in overseas aid, but the ODI said the cost of sending money back to Africa was far higher than the global average.

"Migrants sending $200 home can expect to pay 12% in charges, which is almost double the global average. While the governments of the G8 and the G20 have pledged to reduce charges to 5%, there is no evidence of any decline in the fees incurred by Africa's diaspora. There is no justification for the high charges incurred by African migrants."

A spokesman for Moneygram said the ODI had got its figures wrong. "We don't recognise those numbers at all. There is no Africa premium." He said Moneygram was offering a competitive service for people shunned by high street banks and that someone sending £200 from the UK to Africa would pay a charge of 5.1%, including foreign exchange fees, against a global average of 4.9%.

Western Union said: "The average global revenue earned by Western Union from transferring money (including fee and FX) is 5%-6% of the amount being sent. However, our pricing varies between countries depending on a number of factors such as consumer protection costs, local remittance taxes, market distribution, regulatory structure, volume, currency volatility, and other market efficiencies. These factors can impact the fees and foreign exchange rates offered."

Kevin Watkins, ODI director, said the virtual duopoly operated by Western Union and Moneygram in Africa was stifling competition. "The $1.8bn lost through the super tax could put 14m children in school, deliver clean water to 21m and sanitation to 8m people."

The ODI report did not allege price collusion between Western Union and Moneygram but said it was concerned by the uniformly high fees across countries in Africa, irrespective of underlying market conditions; "exclusivity agreements" with bank and remittance agents in Africa, which have the effect of restricting market completion; and opaque foreign currency conversion charges.

Around $5bn was remitted to Africa from Britain in 2012 and the ODI said that reducing remittance costs to the global average would increase transfers by $85m, rising to $225m if charges were lowered to 5%.

The report called for investigation of global money transfer firms by anti-trust bodies in the UK and the US to identify areas in which market concentrations and business practices were artificially inflating charges; greater transparency over foreign-exchange conversion charges; and regulatory reform in Africa to put an end to "exclusivity agreements".