A US-based financial expert, Kalu Aja has said that states can boost diaspora remittances by leveraging their regulatory power to protect diaspora investments like housing projects.
Aja said state governments could establish a platform that will safeguard remittances meant for home construction, curb fraud, and create a new wave of economic opportunity.
He said this as the Central Bank of Nigeria (CBN) targets huge diaspora remittances to boost foreign exchange liquidity in the country.
In May, the CBN launched the Non-Resident Bank Verification Number platform, an initiative aimed at enhancing financial access for Nigerians in the diaspora.
The apex bank governor, Olayemi Cardoso said with the launch of the NRBVN, the CBN is targeting $1bn in monthly remittances.
“With the introduction of NRBVN and complementary policy measures, we are optimistic about achieving our ambitious target of $1bn in monthly remittance flows, a goal we believe is entirely achievable given the growing trust and convenience in formal remittance channels,” Cardoso said.
But the expert lamented that diaspora Nigerians often face challenges of fraud and trust while remitting money for their projects.
He said the government could hit its $1bn target if diaspora Nigerians are confident sending money home to build a house and other projects.
He said, “Nigerians abroad face issues with welfare remittances sent for tasks like home construction, they often lose cash and trust with questionable quality delivered.
“The State Government has an opportunity here to create a platform to vet private vendors (architects, plumbers, etc.), ensuring funds for building are used without theft.”
He explained that such initiatives have the potential to develop rural areas, boost remittances, create jobs, and generate taxes.
On how the platform will work, he said state governments will partner with a commercial bank that will issue performance bonds to the diaspora who remit funds.
He said vendors in the states will register, and an online market for building materials is created.
He said, “If Emeka in Iceland wants to build an apartment in Abia, he visits the website, selects or requests a design, and gets a cost estimate.
“Emeka hires an architect via the site, signs an agreement, and transfers funds to a banker to the scheme.
“The State issues a CofO to Emeka. A State-registered, privately owned title company, acting as an inspection agent, authorizes releases of funds from the bank to the architect based on milestones (e.g., foundation, fencing).
“The State spends nothing, using only its regulatory powers. The CofO issuance attracts users, drawing more vendors to the platform, creating a global marketplace.”
According to him, foreign exchange deposits will generate millions of dollars for the bank to fund import financing.
He added, “The State can tax the marketplace and train local artisans to provide services.
“This is a win-win. Not all States can do this, but those with a diaspora should leverage it.”
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