Nigeria is exploring the possibility of launching a diaspora bond in the United States next year, with the goal of securing $1 billion in monthly remittance inflows, according to Central Bank Governor Olayemi Cardoso.
In an interview during the recent International Monetary Fund (IMF) and World Bank meetings in Washington, D.C., Cardoso emphasized the increasing interest among Nigerians abroad to invest in their home country. He noted that remittance contributions from the diaspora have doubled since the current administration implemented significant reforms last year.
The proposed diaspora bond would specifically target the U.S., where the largest population of overseas Nigerians resides, and could become a vital financial tool for the Nigerian government. “They are eager to invest beyond just financially,” Cardoso said, adding that the competitive and depreciated value of the naira has made local assets and businesses more appealing to diaspora investors.
Economic Context
Since President Bola Tinubu took office last year, Nigeria has faced numerous economic challenges, including a significant backlog in foreign exchange payments and soaring fuel subsidy costs. The administration’s stringent controls on the naira have complicated the investment environment.
Cardoso, who succeeded former Governor Godwin Emefiele in September 2023 amid legal troubles for Emefiele related to fraud and corruption allegations, expressed optimism about the impact of the bank’s reforms on rebuilding investor confidence. The naira has depreciated by approximately 75% since Tinubu’s inauguration, while fuel prices have increased fivefold. Despite these challenges, remittance flows have surged from $250 million per month earlier this year to $600 million in September, with a target of reaching $1 billion. “I would be surprised if we are not there by this time next year,” Cardoso remarked.
With Nigeria’s foreign reserves exceeding $40 billion, Cardoso suggested that the weakened naira could offer a chance to diversify the economy away from its historical reliance on oil. “Now that our currency is relatively competitive, there should be opportunities for those who have relied heavily on imports to enhance productive activities that have long eluded us,” he noted.
The Central Bank plans to closely monitor inflation and allow economic indicators to inform interest rate decisions. Cardoso stressed the importance of consistent policies in attracting long-term foreign investment, acknowledging that investors are still evaluating the changing economic landscape. “Only time can show that you can stay the course,” he stated.
Engagements with investors, rating agencies, and the diaspora have provided validation for the government’s reform agenda. Cardoso highlighted the need for Nigerians at home, who have felt the effects of these changes, to recognize that the country is on a promising trajectory.
