A very interesting conversation on the piece on Nigeria Diasporas and how they invest in the Nigerian economy. Specifically, this particular comment has gathered dozens of sub-comments. So, let us go deeper to clarify things.
Original 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.”
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Let me add further with a practical case study: as a PhD student in the Johns Hopkins University, I received multiple scholarships, and when the monies started piling up, I decided to use the funds to start a company in Nigeria. I REMITTED that money from the United States to Nigeria, and hired 13 engineers in Owerri, Imo State. That company today is Intel Corporation’s only Africa programmable microprocessor knowledge partner. Please visit Intel website; it is the only listed company from Africa on that site .
This company is our best business and we support companies across Africa. We have renewed our relationships with Intel many times. That company is a product of remittance and I consider it an investment.
So, I do not understand this argument that remittance cannot be used, or cannot be an investment, and that when you remit that you cannot be investing in Nigeria. In Tekedia Capital, at least last month, I know dozens of Africans who remitted funds to invest in many startups we funded back home. Yes, they invested in Cybervergent, Meekfi, Flex Finance, HXAfrica, etc.
More so, when you remit to pay a kid’s school fees, that is social INVESTMENT. And you are investing in Nigeria even if that is to your family farm. It is offensive to classify IMF loan as an“investment” when my INVESTMENT in building Africa’s #1 programmable microprocessor company is not. REMIT and INVEST in Africa!
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Do not allow yourself to be trapped within dogmatic classifications or narrow view of what is or is not investment. Oftentimes local people accept what their foreign counterparts tell them to be true, even when it is not, but question almost everything proposed or advanced by their compatriots. It’s all part of the miseducation and inferiority complexes.
Whether it’s termed Remittance or Investment, the bottom line remains that Nigeria needs all the money it can get, while those who have less to do can continue to argue on naming conventions. Money is money, whether you are using it to buy food or cement, it is the spending that unites all the categorization.
It is the same crase for ‘FDI’, which essentially means funding from non Nigerians, if you are a Nigerian in a foreign land, irrespective of truckloads of dollars you channel to Nigeria, it is not seen as ‘FDI’, because you are a Nigerian…
Just send in the money first, and leave the classification and definition for us to handle.
This man. We are truly blessed to have you here. What a line: ” Money is money, whether you are using it to buy food or cement, it is the spending that unites all the categorization….Just send in the money first, and leave the classification and definition for us to handle. “