At close to $20 billion, the Nigerian diaspora group is the largest investor in Nigeria. It sends more money into the Nigerian economy than any organization. Yet, it is also the least consequential “group” before the Nigerian government. If the World Bank plans a $2 billion loan, it will send us a sermon. If the IMF wants to ship a $1 billion loan, it will ask for reforms. Yet, a group of people wire close to $20 billion, and cannot get a simple shift on how the leaders and the governments act or behave. That is unfortunate!
The funds to rebuild Africa are already available. The lineage of the first generation African diasporas (Robert Smith, Tiger Woods, etc) and the recent diasporas have the capacities to fund Africa. The challenge, unfortunately, is that no one has a vehicle, on how that could be executed at scale.
We like to quote these “monetary figures” as success. Sure, remittance is great. But it is a limited gain. About 90% of my Chinese PhD school mates in Johns Hopkins are now in China (using their LinkedIn profiles). The government has this secondictor fund which is now worth about $100 billion, and if you have ideas, you can apply and the government will fund your mission.
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So, what do they do? You work for AMD, Nvidia, ADI, Intel, etc for 4-6 years, you send a proposal to the government, and within months, the government will help you relocate with $10m in the bank to build products!
Our continent needs to explore how to build such enablers even as the diasporas drop their leftovers for their homelands. Get me right: remittance is great, but it has to go beyond that. There needs to be a framework around this money in the homelands.
Comment on Feed
Comment: “Remittance is not investment.”
My Response: Noted, but you can remit money and the receiver can invest it. People build houses and the funds are remitted and counted as remittance. So, while it is not an investment in the typical sense, the funds are also invested. That said, in my usage, while it cannot be classified as an asset class in the typical investment framework, when you send money into an economy, you are investing in that economy.
That is why cities compete to host sports games because when people come, they help the local economy. If you agree that customers are investors, you can extrapolate that when you sell to that person, that person is investing in your business. So, when diasporas send funds into Nigeria, they’re investing in the Nigerian economy but that would be spent!
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