FMBN, commission move to tap into $25.5bn diaspora remittances

Nigeria has the largest population of African descent in the world and its people constitute a significant proportion of immigrants into countries worldwide each year. According to Federal Government statistics, there are over 17 million Nigerians living in the diaspora. To underscore the critical importance of the diaspora to Nigeria’s economy, leading audit firm PriceWaterhouseCoopers […]

Nigeria has the largest population of African descent in the world and its people constitute a significant proportion of immigrants into countries worldwide each year.

According to Federal Government statistics, there are over 17 million Nigerians living in the diaspora.

To underscore the critical importance of the diaspora to Nigeria’s economy, leading audit firm PriceWaterhouseCoopers (PwC) in one of it’s latest reports revealed that migrant remittances were 77.2 per cent of the federal government’s budget in 2018 and more than 10 times the foreign direct investment (FDI) flows in the same period.

For 2017, World Bank data showed that $22bn was remitted that year alone (about N7.9trillion) the highest in Africa.

The PwC’s latest White Paper Series, ‘Strength from Abroad: The Economic Power of Nigeria’s Diaspora’ estimated that migrant remittances to Nigeria could grow to $25.5 billion, $29.8bn and $34.8bn in 2019, 2021 and 2023 respectively.

Over a 15-year period, PwC said it expected total remittance flows to Nigeria to grow by almost double in size from $18.37bn in 2009 to $34.89bn in 2023.

Explaining further, Dr.Andrew S. Nevin, Partner and Chief Economist, PwC, said the recently established Nigerians in Diaspora Commission (NiDCOM), indicates that the Federal Government recognizes the strategic importance of the Nigerian diaspora.

According to him, the key next steps for the newly established commission is to formulate and execute a strategy to maximize the benefits of Nigeria’s diaspora.

Studies, according to him, show that 70 per cent of remittances are used for consumption purposes, while 30 per cent of the funds go to investment-related uses.

Daily Trust reports that though part of these remittances used on consumption specifically go for family upkeep and other needs, a large chunk of the money is usually meant for residential development back home.

These monies if channelled through the established mortgage system, can deepen and help nurture the industry while diaspora Nigerians will also be able to access mortgages in order to own houses back home in a structured, safe, decent and qualitative environment.

In realisation of the important role diaspora mortgages can play in deepening mortgage finance in Nigeria, the Federal Mortgage Bank of Nigeria (FMBN) in 2014 developed the Diaspora Mortgage Product targeted at Nigerians living abroad to give them an opportunity to participate and benefit from the National Housing Find (NHF) scheme. The loan window offers them mortgage loans to build or buy houses in Nigerian.

To further deepen and extend access to finance for residential housing development in Nigeria for Nigerians in diaspora, the Nigerian Diaspora Commission (NiDCOM) and the FMBN have joined forces to initiate a diaspora mortgage programme where Nigerians in the diaspora can have their homes without going through a third party.

Speaking during a recent visit to FMBN by a team from NiDCOM led by its chairman/CEO Abike Dabiri-Erewa, the MD/CEO of the bank Arc. Ahmed Musa Dangiwa, said the visit was timely because the bank is currently engaging Nigerians in the diaspora on mortgage products developed specifically for Nigerians living abroad.

He said the bank has made several presentations on diaspora mortgage in the UK and the US and has received positive responses and visits from the engagements abroad.

He told the NiDCOM team that, “Although the product has been fully developed, we invite you to feel free to make inputs as we will be happy to share from your wealth of experience in dealing with Nigerians in the diaspora.”

In her response, chairman/CEO of NiDCOM Abike Dabiri-Erewa, said the major challenge of an average diasporan, after passport is housing.

She said the commission intends to partner with the FMBN to develop a diaspora mortgage programme in which Nigerians in the diaspora can have their houses back home at a reasonable interest rate and without going through a third party.