By seeking greater engagement of Nigerians in the Diaspora beyond remittance inflows, President Bola Tinubu’s government may be heading towards a critical juncture in its economic development agenda. The issues raised by the President at the maiden Nigeria-Canada Diaspora Economic Conference in Toronto recently, concerning increased inflows of diaspora capital to Nigeria, are insightful and clearly signal the administration’s realisation that injecting Diaspora Capital into the economy is critical.

Available World Bank data indicate that many developing countries, such as India, Mexico, and China, have benefited immensely from diaspora capital and have thus structured their economic development around these inflows, which largely originate from their nationals in Western societies. Even in Africa, the largest remittance recipient, Egypt, benefits significantly from these inflows in growing its gross domestic product (GDP), enhancing its exchange rate and stabilising consumer and investment spending at the grassroots level.

The Conference, organised by the Nigerians in Diaspora Commission (NiDCOM), under the theme, “Thrive Abroad, Invest at Home” and anchored by the Chief of Staff to the President, Mr Femi Gbajabiamila, had asked for more, beyond remittance inflows. The President, at the conference, acknowledged that “remittances must now become the floor of Diaspora engagement rather than its ceiling.”

The narrative is that Nigerians abroad need to invest in sectors with strong potential for job creation and economic expansion, including agro-processing, healthcare, technology, energy, housing, logistics, mining, education, creative industries and export manufacturing and that the Diaspora needs to embrace collective investment models rather than scattered, personality-driven transactions.

These good talks, however, need to be taken further to achieve meaningful outcomes. The government needs to make sure that all the obstacles to attaining these goals, which are within its purview, are removed and that the benefits to the country are channelled towards enhancing economic and social development.
 
Indeed, diaspora inflows exist because, to a large extent, many young Nigerians do not find the Nigerian economic environment conducive to ply their trade and utilise their skills for their betterment and that of the economy at large. Indeed, many of the countries benefiting significantly from these foreign capital inflows in the form of workers’ remittances are countries where their nationals cannot meaningfully work and get value for their skill set.

They had thus migrated to better organised societies in search of “greener pastures”, especially in the Global North. Nigeria falls into this category and thus, for the Nigerians in the diaspora to transition from merely sending money home in the form of remittances to now being fully involved in domestic production across sectors that initially prompted their exit from the country must be addressed.
 
In other words, the administration would need to look inwards first, before seeking the engagement of the Diaspora in contributing to production in the various sectors. Numerous challenges to capital inflows exist in the country. First is the issue of insecurity, which to date is still a key challenge in enhancing production in the economy. There are reported cases of Nigerians in the diaspora who invested in the agricultural sector and lost much of their invested capital through the menace of the so-called “farmer-herder clashes”, which to date are still largely unresolved.

Some of these persons from the diaspora who actually came home to manage and supervise the operations of their investments in the sector ended up losing their lives. Therefore, the government needs to put things in order to ensure the security of lives and property to assure Nigerians in the diaspora of the safety of their new Diaspora investments or to call on Nigerians abroad to get more involved in the domestic economy.

The other challenge is the harsh business operating environment. The ease of doing business in the country is still challenged despite some progress made in this regard a few years ago. There are challenges in the supply of power and energy for production. The road and physical infrastructure is still sub-optimal and cases of multiple taxation still exist despite the work of the Taiwo Oyedele committee to ameliorate this through the recently concluded Tax reforms of the Tinubu administration.

The administration can make do with great inflows of remittances from the diaspora for now. Nigeria currently ranks second in remittance inflows in Africa after Egypt. It can consolidate on that and learn how other countries with huge remittance inflows have made the best of these funds. Egypt is a clear case of where to start from. The administration’s call for the diaspora to start by establishing professionally managed investment clubs, sector funds, co-investment vehicles and venture networks is quite instructive. However, these can only be relevant when the system works better than is currently the case, even though it is a good place for the diaspora to start their brainstorming on the way forward. The request of government for the diaspora to also pool resources, demand audited accounts, enforce corporate governance and conduct proper due diligence is also quite in order.

Again, the government should understand that many Nigerians in the diaspora, on their own, would be quite eager to invest back home; but they are largely scared that they could lose much of their investments if the challenges militating against a conducive business climate are not addressed. Effort should now be focused less on taking trips abroad at great cost to the national treasury, in foreign exchange, to try and woo your own people to come and invest at home. It means these Nigerians do not really need to be cajoled to come home and invest if the conditions at home are quite conducive.

They are largely scared. Otherwise, coming to invest at home is what should have come to them naturally.

More efforts should henceforth be focused on addressing the challenges to doing business in the country, as well as making efforts to evaluate the level of competitiveness of the Nigerian economy, in relation to other countries across the continent, to enhance the decision-making of the diaspora community to invest at home.