Nigeria plans $10 billion Diaspora Fund to attract dollar inflows

Nigeria is planning to set up a $10 billion diaspora fund to attract investment from its citizens living abroad to support critical sectors including infrastructure, health care and education to grow the economy.

The West African country, through its Ministry of Industry, Trade and Investment is seeking bids from asset managers to set up the fund, it said late Thursday.

The “fund is part of broader efforts to strengthen ties between Nigeria and its diaspora, promote national development, and harness the potential” of its nearly 20 million citizens living abroad as “agents of change and development for Nigeria,” the ministry said.

Africa’s largest oil producer has introduced a raft of reforms since President Bola Tinubu came into office in late May to attract investors back into the economy and support the naira, which has lost more than 60% of its value since June.

They 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.

The World Bank estimates that Nigerians living abroad remitted $20.1 billion during 2022. However because many of the transactions are conducted through the so-called parallel market, the dollars don’t enter the official foreign exchange market, where scarcity of the greenback has been a persistent problem contributing to volatility and naira weakness.

The proposed asset offering could take the shape of infrastructure, credit and venture capital funds, the ministry said.

Interested firms, including joint ventures and greenfield funds, are encouraged to apply by May 6, the ministry said.