Govt Targets $35bn Diaspora Remittances for Housing Development

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The several billions of dollars being remitted annually by Nigerians in Diaspora may be the target of agencies of the Federal Government for use in developing the country’s housing sector, OKECHUKWU NNODIM reports

In its bid to cut down the 17 million housing deficit in Nigeria, reduce corrupt practices and ensure adequate use of foreign exchange sent home by Nigerians in other countries, the Federal Government has commenced moves aimed at using part of the billions of dollars remitted annually by Nigerians in Diaspora for the development of houses across the country.

The initiative, which is spearheaded by the Federal Housing Authority, in collaboration with the Independent Corrupt Practices and other related Offences Commission, also has a target of providing a sustainable forex inflow of at least $10bn annually into the Nigerian economy.

According to the FHA, government’s intention is to use funds sent back home for the construction of what could be termed Diaspora cities in different locations across the country.

It stated that over 15 million Nigerians were in Diaspora and that individual remittances hit $21bn in 2013, adding that with a secured housing programme in place, it could be as much as $35bn.

Speaking on the significance of using Diaspora funds for housing development, the Chairman of the ICPC, Mr. Ekpo Nta, stated that a lot of Nigerians living abroad were often defrauded whenever they sent money home for the construction of houses or for other forms of investment.

In a bid to address this disturbing issue, he said his agency had decided to partner the FHA to help Nigerians in Diaspora channel their funds to projects that could be guaranteed as well as help grow the economy and increase the amount of forex coming to Nigeria annually.

Nta, who spoke in Abuja, said, “By way of introduction, I want to state that I was invited by Nigerians in Diaspora Organisation sometime in 2015 to come to their meeting in Germany. At the end of that exercise, I came back home and did a lot more investigations and discovered that they had two main problems. First, in 2015, they sent back to Nigeria $25bn as remittance.

“Now, when you break down this money that they sent home, it is generally to secure accommodation for themselves either by building through relations or developers; to give allowances to their parents; or to start up businesses. And in all three cases, the findings I had through my organisation were that their aspirations were not met.”

He added, “Most of the money meant for buildings, if they wanted a duplex, the people would deliberately build stores; and when they complained, those who built the structures would take them away just like that. And sometimes these people created artificial security problem so that those in Diaspora won’t even come home to ask for the money they sent. For the brave ones that decided to come home, they were kidnapped and when released, they didn’t come back home again.

“Some others went through developers in cities like Abuja, Lagos and other places and had same experience. So we had all kinds of problems and that set me thinking.”

The ICPC boss said he had to come up with a Memorandum of Understanding between the anti-graft agency and Nigerians living abroad on how to invest their remittances to Nigeria gainfully without being defrauded, as well as contribute to the national economy positively.

He said, “So, I decided to do an MoU between the ICPC and Nigerians in Diaspora, starting from the German chapter. And with that MoU, I told them that if they wanted property and let the ICPC to know their developers, we could help do the land search and verification for free as part of our anti-corruption drive.

“And for their business partners, we could do a security check on them, because if the total foreign reserves of Nigeria as of last month were $30bn for the whole country, and a group is sending $25bn, you don’t ignore that kind of group. And for 2016, remittances to Nigeria from Nigerians in Diaspora moved up to $35bn. These are verifiable things from official sources.”

He added, “After the MoU, I made contact with the FHA boss and told them that the agency could tap into this because the people need good accommodation and they have the funds. I have also gone to the banks on this issue, for if you are transmitting $25bn to your country and Western Union, for example, is taking 0.1 per cent of that, then that is huge.

“So, why can’t Nigerian banks key into it? I’ve sold the same idea to our banks and told them that if they could not set up as individual banks, they could form a consortium of banks and work out their remittances. We need to tap into this to not just build property, but also improve our forex inflow and grow our economy.”

A report by the FHA and the ICPC on Nigerian Diaspora Housing Programme stated that the office of the vice-president would serve as the project facilitator; the ICPC, the promoter; while the authority would serve as the developer and owner.

It stated that the pilot projects, which would be in phases, would be constructed in Abuja, Benin, Port Harcourt and Lagos in 2017, adding that its second phase would be in Enugu, Kaduna, Asaba and Ibadan/Ota in 2018.

A total of 15,680 housing units are to be constructed in the pilot phase, while $630m or N232bn is needed to finance this stage of the construction work.

“The figure is expected to double in the second phase to N1.88tn and with sales revenue, total inflow will be estimated at $6bn or N2.5tn,” the housing authority stated in the report.

Commenting on the development, the Managing Director, FHA, Prof. Mohammed Al-Amin, said the government had commissioned some consultants to seek ways of attracting forex into Nigeria and noted that with the initiative of building Diaspora cities, there was hope in actualising the target.

He further stated that the FHA had held meetings with the ICPC and Osinbajo on ways to drive the initiative and that the two Federal Government agencies had agreed to work together in achieving the set target.

Al-Amin said, “After extensive meetings with the ICPC chairman on the needs of our citizens in Diaspora, we saw it as a golden opportunity to partner the commission. We then formed a small a small committee here in the authority and articulated how we thought the housing project for Nigerians in Diaspora can be actualised.

“We submitted the draft and he went through it and I think that was the basis of how he generated much more interest in what we do here to link us up with Diaspora Nigerians and to ensure that we are able to help them attain their aspirations.”

He also said, “Nigerians need to know that the Federal Government had commissioned some consultants to find out how it could attract more foreign exchange into the country, because as we speak, there is paucity of forex within our economy.

“The consultants came with the idea that the resources being remitted by our citizens from Diaspora are huge opportunities if government will encourage those remittances on sustainable basis through housing. This is because one of the things that the consultants mentioned was that a large chunk of the remittances actually goes into homeownership.

“Unfortunately, these remittances mostly end up in wrong hands or wrong decisions are being taken on them. For out of every 10 Diaspora citizens, hardly will you find five that have not been victims of one issue or the other.”

To address this problem, Al-Amin said the office of the vice president had to intervene and the intervention was to ensure that the remitted funds were used to develop houses with guarantee for Nigerians in Diaspora.

He said, “The Office of the Vice President picked interest in the issue of housing our Diaspora citizens, assisting them to get accommodation and handling issues of homeownership as well as encouraging them to start thinking of coming back home. This will ensure that we have vast experience and bring resources that will be invested back home.

“Based on that, we had another fertile collaboration and recently, we had a meeting in the Presidential Villa with Osinbajo as the Acting President where we discussed this project. The finance ministry too is looking into the issue. Part of what we discussed is captured in the Nigerian Diaspora Housing Programme.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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