Nigeria is exploring the possibility of launching a diaspora bond in the United States next year, with the aim of increasing remittance inflows to $1bn monthly. Central Bank Governor Olayemi Cardoso disclosed the potential bond issuance during an interview with Reuters on the sidelines of the International Monetary Fund and World Bank meetings in Washington, DC
Cardoso highlighted the strong interest among Nigerians abroad in investing back home, spurred by recent economic reforms that have improved the competitiveness of the naira. ‘They really want to invest … beyond just financially,’ Cardoso explained, noting that remittances had surged from $250 million monthly in early 2023 to $600 million in September, with a further target of $1bn a month within the next year.
Reforms under Tinubu’s administration
Since taking office in 2023, President Bola Tinubu has implemented major economic reforms to address Nigeria’s financial imbalances, including a multibillion-dollar backlog in foreign exchange payments, the removal of crippling fuel subsidies, and adjustments to the naira’s previously controlled exchange rate. These measures, while initially challenging for citizens, have bolstered investor confidence and attracted Nigerian diaspora interest in supporting the economy.
Cardoso, who was appointed in September 2023, has taken steps to rebuild trust in Nigeria’s economic environment, with international reserves now topping $40bn. He believes the current competitive naira rate is encouraging Nigerians abroad to consider asset and business investments in Nigeria, helping to diversify an economy historically reliant on oil.
A strategy for economic diversification
With the naira’s value significantly lower since Tinubu’s reforms, Cardoso sees a unique opportunity for Nigerians to support local production over imports, which could enhance the country’s economic resilience. ‘Our currency is now relatively competitive… there’s an opportunity for those who relied on imports to expand domestic production,’ he stated, emphasising the potential for greater self-reliance in various industries.
Attracting long-term investment
Cardoso noted that policy consistency is crucial for attracting sustainable foreign investment. While investors have been cautious, ongoing reforms aim to create a more predictable economic environment. ‘Only time can show that you can stay the course,’ he commented, reinforcing the need for patience in restoring investor confidence.
In his meetings with investors, ratings agencies, and diaspora representatives, Cardoso sensed growing support for Nigeria’s economic direction. ‘It’s important for those at home, who have endured these reforms, to see we’re on the right path,’ he said.
As Nigeria pushes forward, the government’s commitment to structural reforms and diaspora engagement represents a concerted effort to establish economic stability and foster growth.
Credit: Reuters
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