By Chesa Chesa
The much anticipated report on Diaspora investments in Nigeria’s agriculture sector, conducted by Nextier Advisory on behalf of GIZ and funded by the European Union, has been released.
The report, titled: ‘The Importance of Diaspora Investment in the Economic Development of Nigeria’, in furtherance of the Nigeria Competitiveness Project (NICOP), was unveiled yesterday during a webinar anchored from Abuja.
Participants included the lead presenter, Emeka Okafor; Mr. Andrew Smith; Ms. Badewa Adejugbe-Williams; as well as representatives of the Ministry of Finance; Ministry of Industry, Trade, and Investment; the Nigeria Diaspora Commission (NIDCOM), among others.
The report focused on potential diaspora investments in Nigerian agricultural value chains like in tomatoes, ginger and chilli, and is part of a wider West Africa Competitiveness Programme (WACOMP).
It aims to support several selected value chains at the national and regional levels to promote structural transformation and better access to regional and international markets while considering social and environmental concerns.
It also seeks to find traditional and innovative finance sources for the selected value chains in tomato (and chilli/pepper), ginger, leather, and garment. The focus states are Kano, Kaduna, Plateau, Ogun, Oyo, Lagos, and Abia. The channelling of investment from the diaspora is one of the innovative finance sources that NICOP has highlighted with high potential for the selected value chains.
The report was obtained using four research methods in this study: desk research, consultations with experts, focus group interviews and online surveys, which received about 100 respondents from four continents.
Having noted that the Nigerian diaspora community, estimated at about 15 million persons, remitted nearly $22 billion in 2019 into Africa’s biggest economy, the report highlighted some key take-aways.
These include: There is an appetite for investing in Nigeria and also in agriculture; The major restraint in investment in Nigeria is trust; Over 70 percent of the survey respondents opted to invest in a fund instead of investing directly in a business; 60 percent of focus group participants believe that a reputable international organisation’s involvement will build confidence in the initiative; Desk Research and surveys show that the USA and UK have the highest number of Nigerians in Diaspora
To achieve success, the report identified four tool kits that can be considered essential towards actualising the initiative, and for which a toolkit coordinator should be appointed from the beginning of the process to coordinate all the activities.
The four pillars of the tool kits are: 1. Agribusiness MSMEs: This includes all the MSMEs in the selected value chain that require the fund. The toolkit details the possible requirements and structure necessary for the organisation of these MSMEs.
2. Multi-stakeholder Partners: This initiative will require public and private partnership for it to be successful and the report listed the likely partners as well as their contributions.
3. Investment Product: This involves the medium and details of the investment.
4. Diaspora Community: This is the target audience for the initiative, and the tool kit describes what will be needed to engage them.
The Nextier report also made some recommendations based on the research findings, including that the pilot corridor should be chosen between USA and United Kingdom, which have the highest Nigerian diaspora population and from which the most remittances have been sent.
Also, the minimum investment amount should be $1000 as data from surveys carried out by the Commonwealth show that the minimum amount remitted to Nigeria is a little above $1000.
Furthermore, investment should be domiciled in Naira son as to reduce the effects of currency fluctuations and inflation; while the initiative should target middle-class professionals and high network individuals in the Nigeria Diaspora community who have the financial capacity to risk $1000 without it affecting their net worth.
