Sterling Bank Plc is leading a drive by Nigerian lenders to persuade the country’s citizens residing overseas to send money (remittances) home.
According to Bloomberg, the head of Sterling Bank’s year-old diaspora-services programme, Mr. Tunji Adeyemi, traveled from Lagos to Scotland late last year, seeking to persuade Nigerians living there to deposit their pounds in his bank’s vaults.
The news agency reported that Adeyemi, who was in a Glasgow arts centre, attending to crowds of people, disclosed that the Scottish city was just one stop in Sterling Bank Plc’s drive to get Nigerians abroad to open 5,000 new accounts back home this year.
The visit, which also took Adeyemi to Manchester and Belfast, winning more than 500 new accounts, is intended to boost foreign-currency revenue amid a shortage that has crippled everyone from manufacturers to airlines.
Adeyemi, who is reportedly planning another multi-city trip, probably to Chicago and Atlanta, by April, was quoted by the news agency as saying : “We are ready to go all out. It’s not about having a physical branch in the U.K. It’s about your hunger and aggressiveness.”
The Federal Government is also trying to boost foreign currency inflows via the estimated 15 to 18 million Nigerians who live overseas. Last week, the Debt Management Office (DMO) announced that it was raising a $300 million diaspora bond.
The Nigerian diaspora officially sends about $20 billion home annually, the world’s fifth-largest receiver, according to World Bank data. Based on a Sterling Bank study, remittances through informal channels may equal that amount.
Nigerian depositors abroad can transfer funds directly to relatives at home and to invest at home, both for a fee. The drawbacks are that their investments are in the naira, a struggling currency that can’t easily be redeemed for the money they use abroad. Azimo, a London-based money transfer company, estimates that 80 per cent of the wires it sends to Nigeria are for family support, which could include food, school fees and health care.
“Remittances are an injection of money into people’s hands,” said company co-founder, Michael Kent. “They spend it where they think they’ll have the most impact.” Diaspora accounts can be held in foreign currencies such as pounds, euros or dollars.
Once opened, customers can use Internet banking to make transfers, convert to naira and make foreigncurrency and naira investments back home. Nigerian banks are especially eager to help diaspora customers navigate the country’s cutthroat real estate market.
A depositor abroad could use the bank’s services to find reliable developers, finance and purchase a house in Nigeria, for instance.
While Internet banking has enabled banks to provide customers abroad a new range of services, regulation hasn’t caught up.
The Central Bank of Nigeria (CBN) requires in-person biometric registration at banks or special centers, as well as recent utility bills at a Nigerian address. According to Bloomberg, lenders get around this by encouraging customers to use addresses through which they can be reached, of family or a holiday home.
They also get accredited biometric registration agencies to accompany them on their outreaches. Guaranty Trust Bank, Zenith Bank and First Bank of Nigeria, are among the banks that have invested in a U.K. branch. Chief Financial Officer at Sterling Bank, Abubakar Suleiman, stated that Nigerians living abroad aren’t going to send their money home if they don’t think they’ll get a fair deal. “They may have some element of nationality and compassion for the country.
At the end of the day, if the economics are not right, it’s very difficult to get them to make an investment,” he was quoted as saying.
Bloomberg also quoted the Senior Special Assistant to President Muhammadu Buhari on Foreign Affairs and the diaspora, Abike Dabiri-Erewa, as saying : “Perhaps one of the reasons we have not collapsed is because of the diaspora’s support.” While investment and equities slump, remittances were relatively stable as of last year, data shows. Dabiri-Erewa’s team has drafted a policy that would commit the government to help reduce remittance fees and enable diaspora investment.
And by advocating for a law that grants Nigerians abroad the right to vote, the former lawmaker hopes emigrants will have one more reason to give back.
Remittances are a lifeline in a nation where two-thirds of the population lived on less than a dollar a day in 2010, according to the most recent poverty survey by Nigeria’s statistics agency. Nigeria received 60 percent of the remittances sent to sub-Saharan Africa in 2015, says the World Bank, estimating that remittances to the region grew 3.4 per cent in 2016.
