Targeting our diaspora

A nation gets Foreign Exchange in 5 main ways
1.Exports
2.Foreign Portfolio Investment FPI
3.Foreign Direct Investment FDI
4.Remittances
5.Loans
seems Nigeria has  focused only on Loans..
Only one source  however has remained constant….and has increased as the economy has tanked, which do you think it is?
yes Remittances.
This is where we should focus…Look for a way to subsidize the cost of remittances…make it almost free and effortless for Chike or Ronke to send £100 to Nigeria. Cash deposit in the US is paying less than 2% per annum….Nigerian banks bonds (GDRs) quoted on the London Stock exchange are paying average 7%….Chike can “invest” £100 in a tolled Second Niger bridge if the FGN..
1..makes it easy
..FGN launches a Remittances Fund.. but make it online, link it to all the major banks Barclays, Bank of America etc. Chike can download the FGN Remittances app…invests £10, (yes Ten Pounds) from any bank account offshore, it’s converted to Naira, pooled and invested locally. Chike earns 5% every six months, paid into a bank of his choosing offshore in any currency of his choosing.
2. make it worth his while
let the FGN pay all taxes and fees..let Chike get 5%..after tax…ie pay the tax in the country of his domicile on his behalf
3. make it safe
a..guarantee this bond with the full faith of the FGN.
b.set up a sinking fund locally by a special tax on the 41 items on the forex prohibited list.
unban them..then tax them.
Pool this fund into a Remittances Pool Fund, RPF, funded by taxing exports to Nigeria at Port of export, so if I want to export wheat to Nigeria from USA, I pay a tax in the US in dollars. this pools exists to pay Chike his £20 if the bridge tolls are delayed
c. tax all crude oil sales 1% and also put into the RPF..derisk the transaction.
give the fund to JP Morgan to manage, appoint State Street as Custodians.
d. make the transaction transparent, let Chike money go to contractors directly…..let contractors via banks pay to RPF who pay Chike. Govt role? limited to initial approvals ONLY. pass a bill.
Remittances to Nigeria are expected to reach $35b next year….they are at $25b now. With the devaluation, $20 in Ronke’s pocket is now close to N8,000. Do the maths..if she sends $20 a week (her Starbucks budget) that’s N48k a month..or N384,000 a year. If 100 “Ronkes” download the FGN RFP app and invest $20 a week for one year that’s N38,400,000.00…yes N38m a week.
What if Ronke took out a mortgage and invested $10,000 in this safe investment that beats US inflation and guaranteed her a steady income? what if 100 Ronke’s did this? Who loses? Ronke borrows at 2%, invests at 5%, Nigeria get forex for long term that won’t fly way, equity fx to build bridges and ports..
I won’t bore you with the result but we can build out our infrastructure by taking advantage of record low interest rates in the USA, our huge diaspora and a devalued Naira. Crowdfund the bridges and rails.
it’s not hard…if you know how
it’s our problem, we can fix it
(Photo Credit: international Diaspora Engagement Alliance)