Defending interests of diaspora for investments in Nigeria

Last week, President Muhammadu Buhari met with Nigerians living in Spain on the sidelines of his official visit to the country and pledged that Nigeria will continue to defend the interests of Nigerians living abroad.

Those at the venue of the meeting where Buhari spoke with the Diaspora team included the President, John Bosco, President of the association, his deputy, Richard Omoregbe, Super Eagles player who plies his trade with Leganes FC, Madrid, Kenneth Omeruo, Obinna Okafor, a football agent, Mohammed Bashir, a student of Aviation, Segun Adedoyin, studying Global Affairs, and Bright Omorodion, a businessman.

Referring to the Nigerians he addressed as ambassadors of the country in Spain, the President said: “Many of you are here for different reasons, some for a fulfilling career in sports, especially football, from where you earn respectable incomes to sustain yourselves as well as maintain your extended families in Nigeria and make investments back home. Some of you are engaged in other businesses that have enhanced your socio-economic status, both here and at home. More importantly, through your commitment to your various callings, you have enhanced the name and image of our country, thereby earning Nigeria respect in Spain.

“…I wish to encourage you to continue to be role models for our youth back home as well as sustain the image of being excellent ambassadors of Nigeria in Spain and live peacefully in the various communities in which you reside here.”

The President, whom Abike Dabiri-Erewa, Chairman of Nigerians in Diaspora Commission (NiDCOM) describes as “the most Diaspora-loving President” explained why he established the Commission:
“As I have always done whenever I am abroad, I wish to reassure all of you in Spain, of the determination of the Federal Government of Nigeria, to continue to remain engaged with our compatriots in the diaspora, for more purposeful partnerships that impact our country and people,” he said, “it is in the quest for actualising this objective that I established the Diaspora Commission to give focus to the management of this partnership that leads to a win-win situation for Nigeria, at home and abroad.”

If well planned, Nigerians living abroad can play key roles in the future of the country, particularly in the area of economic development. The diaspora, as a community, must, therefore, be tapped to grow the country’s economy.

Nigeria’s diaspora is an asset that can make a big difference in the country as they could transfer business ideas and practices from abroad.

Considering that Nigeria has one of the most resilient, hardworking, intelligent and resourceful people in the Diaspora, in every field of human endeavour, it would be very tragic if the country fails to tap this immense potential.

On their part, it is for Nigerians living abroad to think of home. Thankfully, in the age of globalisation, Nigerians in the Diaspora do not have to return home to contribute to the development of their country. They can do so through several means and ways. And one of these is to subscribe to the Diaspora Bond issued by Nigeria’s Debt Management Office (DMO).

Diaspora Bonds are simply bonds issued by a country to its citizens abroad (Diaspora) to tap into their wealth in the adopted developed countries. They are essentially a form of government debt that targets members of the national community abroad. The sale of the bond can be restricted solely to members of a particular nationality or opened to all buyers, with nationals receiving a preferential rate.

The bond represents an opportunity for cash-strapped developing countries to gain access to the financial resources of their citizens abroad, something that has been tried and tested by two countries with famously large and industrious diaspora populations – Israel and India.

For governments that have large diaspora populations, the bonds provide an opportunity to tap into a capital market beyond international investors, foreign direct investment or loans. It is an attractive source of funding for governments that have experienced difficulties raising money on the international market or attracting investment.

While Nigeria is not among countries unable to raise funds from the international markets or attract foreign investments, her citizens are among the largest and, perhaps, the richest diaspora populations in the world.

There are over 17 million Nigerians in the Diaspora who send money home, annually, for various reasons. The total remittances by such Nigerians rank second to the proceeds from petroleum as foreign exchange-earners. The United Kingdom and the United States of America are said to have over two million Nigerians each.

According to the World Bank’s Migration and Remittances Factbook 2016, remittances from Nigerians living abroad hit $20.77 billion in 2015, making Nigeria the sixth-largest recipient of remittances in the world.

The report says that remittances to Nigeria rose every year over the last decade from $16.93 billion in 2006 to $20.83 billion in 2014. And in 2016, remittances by Nigerians abroad were over $35 billion. This was the highest in Africa and the third-largest in the world.

The top two sources for Nigerian diaspora remittances in 2015 were the United States ($5.7 billion) and the United Kingdom ($3.7 billion). Between 2011 and 2014, Nigerians in the Diaspora had remitted $63.17 billion (N10.35 trillion) into the country. Analysis of remittances showed that $11 billion (N1.8 trillion) was remitted in 2011, $21 billion(N3.44 trillion) in 2012, $20.77 billion (N3.40 trillion) in 2013 and $10.40 billion (N1.7 trillion) in the first half of 2014. The global top ten remittance recipients this year were India ($72.2 billion), China ($63.9 billion), the Philippines ($29.7 billion), Mexico ($25.7 billion), France ($24.6 billion), Nigeria ($20.77 billion), the Arab Republic of Egypt ($20.4 billion), Pakistan ($20.1 billion), Germany ($17.5 billion), and Bangladesh ($15.8 billion).

Nigeria tops the top ten remittance recipients in Africa with $20.77 billion, followed by Ghana ($2.0 billion), Senegal ($1.6 billion), Kenya ($1.6 billion), South Africa ($1.0 billion), Uganda ($0.9 billion), Mali ($0.9 billion), Ethiopia ($0.6 billion), Liberia ($0.5 billion), and Sudan ($0.5 billion).

This is a huge potential source of funding for Nigeria which has battled deficits in the national budgets in recent years. What remains, as the President pointed out, is for Nigeria to continue to aggressively protect and defend the interests of all Nigerians abroad, especially the law-abiding compatriots, to make them feel loved and important and make more investments home.

Looking beyond current challenges for opportunities in Africa

President Muhammadu Buhari, last week, called on investors to look beyond current global challenges and focus on opportunities. There are no challenges without opportunities and solutions, the President argued rightly.

The President spoke, recently, in Madrid when he addressed the Spain-Nigeria Business meeting organised by the Spanish Chamber of Commerce and the Federal Ministry of Industry, Trade and Investment during his state visit to Spain.

The President said to the Spanish and Nigerian corporations and investors to, therefore, look towards Africa for the opportunities therein. However, while there is, and will always be, economic growth in many African countries, the key issue is whether the growth is inclusive and if all of Africa benefits.

The population of Africa will reach an estimated two billion in the next 30 years and, currently, over 50% of the population in sub-Saharan Africa is under 19 years old. Africa is poised to benefit from a “demographic dividend” – a large number of youths entering the workforce. This young talent must be harnessed to maximise opportunities and avoid political and social risk.
The combination of economic growth and population growth means that the big future for Africa has not yet been written.

However, factors such as frustrated youth due to unemployment, the effects of climate change, which could lead to food shortages and non-inclusive cities could lead to a disconnect, with some parts of Africa advancing while others are left behind.

Technology and urbanisation will be the big drivers, offering the chance to rethink what a city might be like – 800 million new people will be living in cities that do not even exist yet! There could be a megatrend of increasing power needs throughout Africa as the population explodes and the imperative to use energy more efficiently, sustainably and safely.

Of course, as the President has said, there are no challenges without opportunities, in the same way, there cannot be investment without risks. It is impossible to do business without taking on some risks and all countries have their inherent risks. Thus, there is the need to separate risks into three categories when deciding how to invest in Africa – political, ethical and economic.

Still, Africa is larger than the United States, China, India, Japan and the whole of Europe put together, yet many in the West are ill-informed about it. A lot of attention is being paid to BRIC countries, but Africa hardly rates a mention, except in a negative context.

Yet over the past decade, six of the world’s ten fastest-growing countries were in Africa. With a population of over one billion – the fastest growing and youngest in the world – and an emerging middle class, Africa has consumers who are more prosperous today than ever.

However, the sheer number of countries (54), currencies, languages and physical and cultural borders – not to mention poor infrastructure, corruption and political instability – are major obstacles for businesses interested in capitalising on the opportunities that exist in Africa and, interestingly, too, present Buhari and other Africa’s leaders the challenges they need to address to make Africa the investment continent they wish to see.

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