April 29, 2024/CSL Research
The Federal Government has unveiled plans to establish a Nigeria Diaspora Fund worth US$10 billion aimed at attracting foreign investments into the country. Led by the Federal Ministry of Industry, Trade, and Investment (FMITI), this initiative stems from thorough discussions with capital market experts and investment stakeholders.
The fund aims to consolidate the billions of dollars remitted into the country, estimated at around US$20 billion by the World Bank last year. The fund provides a structured platform for Nigerians living abroad to invest in their home country, channeling their resources into various sectors such as infrastructure, healthcare, education, and more.
According to the honorable minister of Industry, Trade, and Investment, Doris Uzoka-Anite, the ministry is actively seeking fund managers for the Nigeria Diaspora Fund and there are plans to issue a call for Expression of Interest (EOI) from potential fund managers. The responsibilities of the fund manager will encompass designing and establishing the fund, covering legal, operational, financial, and administrative aspects.
The investment horizon is projected to span 3 to 5 years initially, with potential follow-on investments thereafter. The fund’s duration is set at 10 years, with the option of a 2-year extension. Eligible fund managers must demonstrate a track record of conducting business in Nigeria over the past five years, as well as a proven ability to raise capital and effectively manage sizable and profitable funds.
This is a laudable initiative in our view as the primary aim of the fund is to provide support to critical sectors such as infrastructure, healthcare, entrepreneurship, and education, ultimately driving economic growth. The Fund will serve as a catalyst for sustainable development, leveraging the financial resources, expertise, and networks of the diaspora community to drive socio-economic progress in the country.
Remittances from Nigerians living abroad are a significant source of foreign exchange inflows. By leveraging these remittances through the fund, Nigeria can potentially boost its foreign exchange reserves and stabilize its currency.
