By Johnbosco Agbakwuru
IN a bid to boost agricultural production, a diaspora group has planned to invest in tomato, chilli/pepper, ginger, leather, and garment in Kano, Kaduna, Plateau, Ogun, Oyo, Lagos, and Abia states.
The initiative should target middle-class professionals and high network individuals in the Nigeria Diaspora community.
A report by GIZ and Nigeria Competitiveness Project, NICOP on potential diaspora investments in Nigerian agricultural value chains like in tomatoes, ginger and chilli, explained that the groups have the financial capacity to risk $1000 without it affecting their net worth.
The report was conducted by Nextier Advisory on behalf of GIZ and NICOP.
It stated that the West Africa Competitiveness Programme, WACOMP, funded by the European Union, EU, is aimed at supporting 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 further explained that the program’s primary objectives were to strengthen West African countries’ competitiveness and enhance their integration into the regional and international trading system (WACOMP 2020).
It stated, “This study focuses on the Finance pillar of the programme. It 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 channeling of investment from the diaspora is one of the innovative finance sources that NICOP has highlighted with high potential for the selected value chains.
“This study aims to map out options to channel Diaspora investment by reviewing similar initiatives, engaging the diaspora community and relevant organisations and developing a tool kit to facilitate the channeling of remittances to the selected value chains.”
The report further stated that there is an appetite for investing in Nigeria and also in agriculture saying the major restraint in investment in Nigeria is trust.
It also added that Nigeria will receive $21.7 billion in remittances in 2020 as against the 23.8 billion recorded in 2019.
The report explained that the key factors driving the declines were weak economic growth and uncertainties around jobs in resident country, high USD exchange rates and a weak oil price for oil export dependent countries like Nigeria.
Besides, it explained that the aftermath of the outbreak of the Coronavirus pandemic will mean that physical interactions will be less than optimal and so this might result in delays in response and engagement with key stakeholders.
The report recommended that “the pilot corridor should be chosen between USA and U.K: These corridors have sent the most remittances, have a vast Nigeria population, diaspora groups and have a high GDP per capita. o Minimum investment amount should be $1000.
“Data from surveys carried out by the Common Wealth shows that the minimum amount remitted to Nigeria is a little above $1000. o Investment should be domiciled in Naira: This will reduce the effects of currency fluctuations and inflation.
“The initiative should target middle-class professionals and high network individuals in the Nigeria Diaspora community. These groups have the financial capacity to risk $1000 without it affecting their net worth.”
The Report noted that there is an appetite for investing in Nigeria and also in agriculture and that the major restraint in investment in Nigeria is trust.
It said over 70 percent of the survey respondents opted to invest in a fund instead of investing directly in a business, while 60 percent of focus group participants believe that a reputable international organisation’s involvement will build confidence in the initiative.
The Desk Research and surveys also showed that the USA and UK have the highest number of Nigerians in Diaspora
It said, “Countries with comparable diaspora dynamics to Nigeria have successfully carried out similar initiatives to channel investments from their Diaspora population.
” The suggested tool kit for actualising this initiative is divided into four central pillars informed from research insights. A toolkit coordinator should be appointed from the beginning of the process to coordinate all the initiative activities. In this report, we have narrated every aspect of each pillar to ensure this initiative’s success.”