Foreign investments in Nigeria are projected for growth in the coming months, as the Federal Government unveiled a remarkable investment worth $10 billion.
The Nigeria Diaspora Fund, amongst other things, aims to foster remittances, entice foreign investments, and promote philanthropic initiatives that will greatly contribute to the growth of vital sectors crucial for Nigeria’s economic development.
The unveiling of the fund to drive foreign investments in Nigeria was disclosed by the country’s Ministry of Industry, Trade and Investment, which noted that the initiative follows extensive consultations with stakeholders in the capital markets, the investment community, and diaspora investors.
The project aims to attract private sector and foreign direct investments into Nigeria.
The ministry also called on eligible firms to express their interest in managing the fund, which will be guided by an Advisory Board comprising Limited Partners.
“The fund will be managed by Fund Managers that satisfy the criteria set out in the Expression Of Interest (EOI). The fund manager will propose structures that will focus on various sectors and stages of investments.
“Subject to the preferences indicated by Fund Managers. The fund will contain multiple investment platforms designed to offer investors different mechanisms for participating in Nigeria’s economic transformation.
“This fund is a way of encouraging remittances, attracting investments, and facilitating philanthropic endeavors aimed at supporting various sectors such as infrastructure, healthcare, education, and entrepreneurship in Nigeria,” the ministry stated.
The launch of The Diaspora Fund is part of broader efforts to strengthen ties between Nigeria and its diaspora, promote national development, and harness the potential of The Diaspora Community as agents of change and development for Nigeria.
The Ministry added that the fund managers will be responsible for designing investment platforms focused on various sectors such as infrastructure, healthcare, education, and entrepreneurship.
The launch of the fund underscores the government’s commitment to strengthening ties with its diaspora community, recognizing them as pivotal agents of change and development to catalyze Nigeria’s economic development and empower citizens residing abroad to actively participate in driving the nation’s economic growth.
With an investment period of three to five years and a lifespan of ten years, extendable by two years, the fund presents an opportunity for diaspora investors to contribute meaningfully to Nigeria’s socio-economic advancement.
“As part of this process, a committee was set up to design and develop the structure for a Diaspora Fund. Various stakeholders in the capital markets, the investment community, and diaspora investors were engaged and also consulted on the establishment of the $10 billion Nigeria Diaspora Fund. The Ministry therefore issued this call for Expression of interest (EOI) to Fund Managers for the development and establishment of a multisectoral, multilateral private sector-led investment fund to form the $10 billion Nigeria Diaspora Fund,” the ministry added.
Foreign investments in Nigeria suffers decline
In 2023, Nigeria’s foreign investment inflows plummeted by 26.7% to US$3.9 billion from US$5.3 billion in 2022. This decline stemmed from consecutive drops in foreign investment throughout the first three quarters of 2023, driven by political risks and heightened production costs.
Tinubu’s reforms
Africa’s largest oil producer has introduced a raft of reforms since President Bola Tinubu came into office to attract investors back into the economy and support the naira, which has lost more than 60% of its value since June.
Parts of the policies include -relaxing foreign exchange controls, easing rules on international money transfers, and reducing the gap between the central bank’s policy rate and yields on the short-dated paper it sells at auctions.
Meanwhile, the World Bank estimated that Nigerians living abroad remitted $20.1 billion during 2022. However because many of the transactions are conducted through the parallel market, the fx were not captured into the official foreign exchange market.
The proposed asset offering could take the shape of infrastructure, credit, and venture capital funds, the ministry said, adding that interested firms, including joint ventures and greenfield funds, should apply by Monday, May 6, 2024.
