Diaspora Advocacy 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 would continue to uphold the interests of Nigerians living abroad.
Among those present at the venue of the meeting where Buhari spoke with the Diaspora team were the president, John Bosco, chairman of the association, his deputy, Richard Omoregbe, a Super Eagles player who plies his trade with Leganes FC, Madrid, Kenneth Omeruo, Obinna Okafor, football agent, Mohammed Bashir, aviation student, Segun Adedoyin, global affairs student, and Bright Omorodion, businessman.
Referring to the Nigerians he addressed as the country’s ambassadors to Spain, the President said, “Many of you are here for different reasons, some for a fulfilling career in sport, especially football. , from where you earn a respectable income to support yourself as well. such as maintaining your extended families in Nigeria and making investments in your home country. Some of you are engaged in other endeavors that have improved your socio-economic status here and at home. Most importantly, through your commitment to your various vocations, you have enhanced the name and image of our country, earning the respect of Nigeria in Spain.
“…I wish to encourage you to continue to be role models for our young people at home, as well as to maintain the image of excellent ambassadors of Nigeria in Spain and to live in peace in the different communities in which you reside here.”
The President, whom Abike Dabiri-Erewa, Chairman of the Nigerians in Diaspora Commission (NiDCOM) describes as “the most loving President in the Diaspora”, 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 partnerships that impact our country and people,” he said, “it is in pursuit of achieving this goal that I created the Diaspora Commission to focus on managing this partnership which leads to a win-win situation for Nigeria at home and abroad.
If planned well, Nigerians living abroad can play a key role in the future of the country, especially in the area of economic development. The diaspora, as a community, must therefore be harnessed to grow the country’s economy.
The Nigerian Diaspora is an asset that can make a big difference in the country as it could transfer ideas and business practices from abroad.
Considering that Nigeria has one of the most resilient, hardworking, intelligent and resourceful people in the Diaspora, in all spheres of human endeavour, it would be very tragic if the country fails to harness this immense potential.
For their part, it is up to Nigerians living abroad to think about their country of origin. Fortunately, in the era of globalization, Nigerians in the diaspora do not have to return home to contribute to the development of their country. They can do this by several means and ways. And one of them is to subscribe to the Diaspora Bond issued by the Debt Management Office (DMO) of Nigeria.
Diaspora bonds are simply bonds issued by a country to its citizens abroad (diaspora) to tap into their wealth in adopted developed countries. It is essentially a form of public debt that targets members of the national community abroad. The sale of the bond may be restricted to members of a particular nationality or open to all buyers, with nationals benefiting from a preferential rate.
The bond represents an opportunity for cash-strapped developing countries to access the financial resources of their citizens abroad, which has been tried and tested by two countries with notoriously large and industrious diaspora populations – Israel and India.
For governments that have a large diaspora, bonds offer the opportunity to access a capital market beyond international investors, foreign direct investment or loans. It is an attractive source of funding for governments that have had difficulty raising funds on the international market or attracting investment.
Although Nigeria is not among the countries unable to raise funds in international markets or attract foreign investment, its citizens are among the largest and perhaps the wealthiest diaspora populations in the world.
There are over 17 million Nigerians in the Diaspora who send money home every year for various reasons. Total remittances from these Nigerians rank second in oil earnings as sources of foreign currency. The United Kingdom and the United States of America are each said to have over two million Nigerians.
According to the World Bank’s Migration and Remittances Factbook 2016, remittances from Nigerians living abroad reached $20.77 billion in 2015, making Nigeria the sixth largest remittance recipient in the world.
The report indicates that remittances to Nigeria have increased every year over the past decade, from $16.93 billion in 2006 to $20.83 billion in 2014. And in 2016, remittances of Nigerians abroad exceeded $35 billion. It was the highest in Africa and the third highest in the world.
The two main sources of remittances from the Nigerian diaspora in 2015 were the United States ($5.7 billion) and the United Kingdom ($3.7 billion). Between 2011 and 2014, Nigerians in the diaspora sent $63.17 billion (10.35 trillion naira) to the country. Analysis of remittances showed that $11 billion (1.8 trillion naira) was transferred in 2011, $21 billion (3.44 trillion naira) in 2012, $20.77 billion ( 3.40 trillion naira) in 2013 and 10.40 billion dollars (1.7 trillion naira) in the first half of 2014. The top ten global recipients of remittances this year were India (72.2 billion billion), China ($63.9 billion), Philippines ($29.7 billion), Mexico ($25.7 billion), France ($24.6 billion), Nigeria ($20.77 billion), 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 recipients of remittances 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 financing for Nigeria which has struggled with national budget deficits in recent years. What remains, as the President pointed out, is that Nigeria continues to aggressively protect and defend the interests of all Nigerians abroad, especially law-abiding compatriots, to make them feel loved and important and make more investments in them.
Beyond current challenges for opportunities in Africa
Last week, President Muhammadu Buhari called on investors to look beyond current global challenges and focus on opportunities. There are no challenges without opportunities and without solutions, the President rightly argued.
The President spoke recently in Madrid when he addressed the Spain-Nigeria business meeting organized by the Spanish Chamber of Commerce and the Federal Ministry of Industry, Trade and Investment during his state visit to Spain.
The President told Spanish and Nigerian businesses and investors to look to Africa for the opportunities there. However, while there is, and always will be, economic growth in many African countries, the key question is whether the growth is inclusive and whether all of Africa benefits from it.
Africa’s population will reach about two billion in the next 30 years and currently more than 50% of the population of sub-Saharan Africa is under 19 years of age. Africa is poised to benefit from a “demographic dividend” – large numbers of young people entering the labor market. This young talent must be harnessed to maximize opportunities and avoid political and social risks.
The combination of economic growth and population growth means that Africa’s great future is yet to be written.
However, factors such as young people frustrated due to unemployment, the effects of climate change, which could lead to food shortages and non-inclusive cities, could lead to disconnection, with some parts of Africa progressing while others are left behind.
Technology and urbanization will be the big drivers, providing the opportunity to rethink what a city might look like – 800 million new people will be living in cities that don’t even exist yet! There could be a megatrend of increasing energy needs across Africa as the population explodes and there is an imperative to use energy more efficiently, sustainably and safely.
Of course, as the president said, there are no challenges without opportunities, just as there can be no investment without risks. It is impossible to do business without taking certain risks and all countries have their inherent risks. Thus, it is necessary to separate risks into three categories when deciding how to invest in Africa – political, ethical and economic.
Yet Africa is bigger than the United States, China, India, Japan and all of Europe combined, yet many in the West are misinformed about it. Much attention is paid to the BRIC countries, but Africa is hardly mentioned except in a negative context.
Yet over the past decade, six of the ten fastest growing countries in the world have been in Africa. With a population of over one billion – the youngest and fastest growing in the world – and an emerging middle class, Africa has more prosperous consumers than ever before.
However, the number of countries (54), currencies, languages, and physical and cultural borders – not to mention poor infrastructure, corruption and political instability – are major hurdles for companies wishing to leverage take advantage of the opportunities that exist in Africa and, interestingly, also present Buhari and other African leaders the challenges they face to make Africa the investment continent they want to see.