A Virile Vision For Nigeria’s Growth And Development Via Diaspora Bonds
By Abidemi Adebamiwa and Titus Olowokere
Nigeria’s infrastructure problems are holding the country back. Roads are in bad shape, electricity is unreliable, and healthcare facilities are stretched thin. The World Bank estimates that Nigeria needs $14.2 billion annually—12% of its GDP—to fix these issues. However, the government only spends $5.9 billion each year, leaving an $8 billion gap. This shortfall affects millions of people and limits the nation’s economic potential. But what if Nigerians living abroad could play a key role in solving this problem?
The Nigerian Diaspora has immense untapped Potential. Nigeria boasts one of the largest diasporas in the world, with an estimated over 15 million Nigerians residing abroad. This vibrant community is not merely a remnant of migration; it is a reservoir of skills, knowledge, and financial resources. The remittances sent back home contribute significantly to the nation’s economy, but the potential for deeper engagement remains largely untapped.
Imagine if the billions of dollars Nigerians abroad send home each year could do more than just support families. Diaspora bonds could make this possible by allowing the diaspora to invest directly in their homeland. These bonds would enable them to fund large-scale projects like better roads, reliable electricity, and improved healthcare while continuing to care for their loved ones. For example, blackouts like the one at University College Hospital in Ibadan could be a thing of the past.
Diaspora bonds are debt instruments issued by a country to its expatriates, allowing them to invest in their homeland while earning a return on their investment. This innovative financing mechanism not only provides much-needed capital for infrastructure projects, healthcare, and advancement of education in Nigeria, but also foster a sense of ownership and responsibility among Nigerians abroad. By investing in diaspora bonds, Nigerians in the Diaspora can contribute directly to the progress of their nation, creating a bridge between their current lives and their roots.
Diaspora bonds are not a new idea—they’ve worked wonders in countries like India and Israel. In their book Innovative Financing for Development: The Role of Diaspora Bonds, Ketkar and Ratha explain how these nations mobilized funds for transformative projects. Nigeria tried this approach in 2017 with a $300 million diaspora bond. It was a hit, oversubscribed by 130%, proving that Nigerians abroad are eager to contribute when they trust the system.
Building on that success, the Nigerian government is planning another diaspora bond in 2025, targeting Nigerians living in the United States. The Central Bank Governor, Olayemi Cardoso, recently announced ambitious plans to attract $1 billion in monthly remittance inflows. Remittances are already growing fast, hitting $600 million in September 2024 compared to $250 million earlier in the year. This growth shows that Nigerians abroad are ready to do more if given the chance.
The potential here is massive. Nigerians living abroad send more than $20 billion home every year. Most of this money goes to supporting families, but what if a portion of it was directed toward national development? Diaspora bonds offer a way to tap into this goodwill. With the right structure, these bonds could fund projects that benefit everyone while still helping families back home.
Take infrastructure, for example. Diaspora bonds could fund projects like building better roads, fixing the power grid, and improving hospitals. These investments would make life easier for Nigerians at home and abroad. Imagine knowing that your contribution helped provide stable electricity or built a hospital in your hometown. That sense of pride and connection is what makes diaspora bonds so powerful.
The education sector is another area where diaspora bonds could make a difference. Nigeria’s public schools are in crisis, with outdated facilities and poor resources. A recent BusinessDay analysis called the system “a mess from top to bottom.” With targeted investments, diaspora bonds could rebuild schools, equip classrooms, and improve universities. This would give millions of students a better shot at success and strengthen the country’s future.
The Central Bank is already thinking big. It plans to attract $1 billion in monthly inflows by offering competitive returns on diaspora bonds. What makes these bonds special is their dual benefit: they provide financial returns while boosting national pride. Nigerians abroad can see their money directly improving lives back home—whether through better healthcare, more reliable power, or stronger schools.
Of course, challenges remain, and trust is the biggest hurdle. Corruption and mismanagement have scared off many potential investors. Stories like the one involving former Central Bank Governor Godwin Emefiele, accused of misusing public funds, highlight why transparency is critical. Without trust, even the most exciting initiatives will fail.
To build trust, Nigeria can learn from India and Israel. These countries ensured the success of their diaspora bonds through strong oversight. They used independent audits, digital fund tracking, and regular updates to reassure investors that their money was being used properly. Nigeria must adopt similar measures to win over its diaspora and demonstrate accountability.
A checklist approach could make this process more manageable. In The Checklist Manifesto, Atul Gawande explains how breaking big tasks into smaller steps helps ensure success. For Nigeria, this means starting with clear priorities. Projects should focus on the most urgent needs, like transportation, energy, and healthcare. Feasibility studies and input from stakeholders are also essential to avoid wasting resources.
The checklist doesn’t stop there. It can also help track progress and ensure transparency at every stage. For example, creating an independent group to manage funds, using digital tools to monitor spending, and providing regular updates to investors can build confidence. These steps show that the government is serious about accountability.
Collaboration is key to making this vision a reality. Diaspora leaders, government agencies, and financial institutions must work together to create a trustworthy plan. In his article Diaspora and Development: Exploring the Economic Potential of Diaspora Engagement, Orozco highlights how structured partnerships can reassure investors. By involving the diaspora in decision-making, Nigeria can strengthen the bond between its citizens at home and abroad.
Implementing diaspora bonds necessitates a supportive legal and regulatory framework that protects the interests of investors while facilitating smooth transactions. The government must work closely with financial institutions to develop and enforce these regulations.
Diaspora bonds are more than just financial tools—they are bridges connecting Nigerians worldwide. They allow the diaspora to invest in their country’s future while seeing tangible results. Whether it’s a new road, a modern hospital, or a rebuilt school, these investments improve millions of lives. This shared effort also fosters a sense of patriotism and pride.
However, as we’ve emphasized, trust is the foundation of this effort. As Ngozi Okonjo-Iweala argues in her article on financial reforms, transparency and accountability are non-negotiable. Measures like independent audits, real-time fund tracking, and clear public reporting are essential to rebuild confidence. These steps will show Nigerians abroad that their investments are safe and impactful.
Investing in diaspora bonds fosters a sense of national pride and unity among Nigerians. It reinforces the idea that no matter where they are, Nigerians are connected by a shared vision of their country’s future. This collective effort strengthens national identity and promotes a sense of belonging.
If done right, diaspora bonds could unlock billions of dollars for Nigeria’s development. They offer a practical way to bridge the country’s infrastructure gap while strengthening ties with the diaspora. By taking bold steps and learning from successful models, Nigeria can transform its development landscape and create a brighter future for everyone.
Imagine a Nigeria where roads are smooth, electricity is reliable, and schools are top-notch. Diaspora bonds can help make this vision a reality. They combine the financial power of Nigerians abroad with the determination of those at home. Together, we can create a stronger and more prosperous nation that thrives for generations to come.
Abidemi Adebamiwa is a geopolitical analyst and Ph.D. candidate with expertise in finance, policy, and African development.
Titus Olowokere is the CEO of the U.S.-Africa Trade Commission, President Emeritus of ANOG, and Director of Administration for NICORE, supporting the economic development of Nigerians in the U.S.
