New accounts: Nigeria’s Central Bank targets diaspora investments

The Central Bank of Nigeria (CBN) has introduced two new account types designed to attract investments from Nigerians living abroad.

The Non-Resident Nigerian Investment Account (NRNIA) and Non-Resident Nigerian Ordinary Account (NRNOA) will enable Nigerians in the diaspora to manage their funds in both foreign and local currencies.

According to a circular signed by W.J Kanya, acting director, Trade and Exchange Department, the new accounts are aimed at facilitating easier and more secure financial transactions for Nigerians in the diaspora.

“The NRNOA enables Non-Resident Nigerians (NRNs) to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies, while the (NRNIA) enables Non-Resident Nigerians (NRNs) to invest in assets in Nigeria in either foreign currency (FCY) or local currency (Naira),” the circular stated.

CBN Governor Yemi Cardoso

The CBN explained that account holders may maintain both a foreign currency account and/or a local currency account to facilitate transactions and participate in diverse investment opportunities.

Additionally, NRNs can use their NRNIA to participate in Nigeria’s Diaspora Bond and other debt instruments issued locally.

The new accounts are expected to provide a safe and secure environment for Nigerians in the diaspora to manage their funds directly and reduce their reliance on third parties.

Eligible NRNs can own these accounts effective January 1st, 2025, subject to meeting Know Your Customer (KYC) requirements.

The CBN’s move is seen as a strategic effort to tap into the vast financial resources of Nigerians living abroad, estimated to be in the millions.

The new accounts are expected to boost investments and facilitate economic growth in Nigeria.

Experts believe that the new accounts will also help to increase diaspora remittances, which have been a significant source of foreign exchange earnings for Nigeria.

According to the World Bank, Nigeria received over $25 billion in diaspora remittances in 2022, making it one of the largest recipients of remittances in the world.

The CBN’s initiative is also expected to complement the Federal Government’s efforts to attract investments from Nigerians in the diaspora.

The government has been seeking to tap into the skills, expertise, and resources of Nigerians abroad to support the country’s economic development.

What stats say

Remittances

In the first 10 months of 2024, Nigeria received $4.22 billion in remittances, which is a 61% increase from the same period in 2023.

The CBN attributes this growth to improved efficiency in the remittance system, President Bola Tinubu’s policies, and increased trust in the diaspora.

Investment

The 2024 Nigerian-American Business Forum (NABF) highlighted the diaspora’s interest in investing in Nigeria, despite concerns about the business environment.

Also, the United Nations Development Programme (UNDP) has provided market intelligence to help the private sector identify investment opportunities in sectors like energy, agriculture, healthcare, and infrastructure.

Remittances are a vital part of Nigeria’s economy, affecting household consumption and foreign exchange reserves.

A World Bank report in 2022 found that Nigeria was the sixth largest recipient of remittances globally, receiving $20.1 billion.

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