The growing interest in investment migration globally and in Africa offers opportunities for Nigeria to increase foreign investment inflows to ease its foreign exchange liquidity challenges, experts have said.

Investment migration or immigration by investment is a process that allows individuals to gain citizenship or residence rights in return for investments in their host countries.

Capital inflows in Africa’s biggest economy dropped to the lowest in 14 years to $3.89 billion last year from $5.42 billion in 2022, according to the National Bureau of Statistics (NBS). The Tinubu administration has a $1 trillion economy target for Nigeria by 2030, up from $472.6 billion in 2022.

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Experts say investment migration serves as an innovative financing tool and has the potential to transform economies by injecting essential foreign capital and encouraging sustainable economic growth

“The industry is worth $58 billion; so Nigeria needs to tap into that industry. They are not reaping from it because of corruption. If not for that, the country should be raking in about $2.5 billion from expatriates,” Idowu Olumide, managing director/CEO of Global Citizenship Services, said.

He said many foreigners have an interest in getting a Nigerian passport. “Immigration by investment has a resultant effect as it creates wealth and foreign investments which creates jobs.”

Stuart Wakeling, managing partner at Henley & Partners, said in an interview with BusinessDay that the demand for investment migration products has risen in recent years as more countries are exploring their unique ability to endow themselves with a source of sustainable revenue without increasing debt, which can burden future generations.

“Investment migration is now an established and fast-growing feature of the global economic landscape, endorsed by large players such as the United Kingdom and the US,” he added.

Two economic recessions in the last eight years have weakened Nigeria’s foreign inflows, resulting in a liquidity challenge in the country’s FX market. The liberalisation of the FX regime last June weakened the naira from 463.38/$ to 1,548.3/$ as of March 1, 2024. At the parallel market, the naira depreciated to 1,544/$ from 762/$

Data from the NBS shows that the high cost of sourcing FX contributed to the surge in the country’s headline inflation rate to 29.90 percent in January from 28.92 percent in the previous month.

Gbolahan Ologunro, portfolio manager at FBNQuest, said what foreign investors will consider before making investments in countries are security, the level of infrastructure development, stability and ease of doing business.

“So, it will not be out of place to say the degree of success of immigrant investor programmes that will be achieved in Nigeria may not march up with those other countries that have implemented it,” he said.

He, however, said it might be an initiative that government can also implement, given that they are trying to get dollar inflows into the country at this critical time.

“We are in a critical situation. Efforts have been largely focused on the amount of short-term approaches or measures to raise interest rates and attract foreign portfolio investment. So, on a long-term perspective, the investment migration programme can be implemented to attract investments into the country

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Omobola Adu, senior economist at BancTrust & Co, said the programme provides another source for earning FX to help support the naira

Before taking or implementing it, the government needs to explore making tourism an attraction to foreigners. In Nigeria, tourism contribution to FX earnings is very small compared to other sources,” he said.

Some of the top countries to obtain residency and citizenship by investment are Malta, Cyprus, Portugal, Spain, Canada and US. Apart from these western countries, some African countries like Mauritius and Namibia are using investment migration programmes to attract high-net-worth individuals.

According to the latest African wealth report, the number of resident millionaires in Mauritius grew by 69 percent from 2012 to 2022. In 2020, the World Bank officially classified the country as a high-income country

Mauritius is known for its pleasant tropical climate, multiculturalism, and spectacular living environments, but its dynamic economy, attractive tax regimes, and competitive business landscape has bolstered the country’s global stature and is attracting high-net-worth individuals and families from around the globe,” analysts at Henley and Partners said.

They said for those who wish to reside in the island nation, the Mauritius Residence by Investment Program is the most efficient way to acquire such status. “Under this programme, individuals who invest in the nation’s real estate market can become Mauritian residents within six to eight months.”

For Namibia, the number of dollar millionaires rose by 20 percent and it is projected to grow by 60 percent in the next decade.

The main target of the programme, at least in its pilot edition that started last February, is to attract foreign investors from nearby South Africa, one of the continent’s biggest economies, according to Henley and Partners.

“Namibia offers a conducive business environment anchored by advanced financial systems and a sophisticated banking sector, a strong macroeconomic framework, globally competitive infrastructure, and good governance, as well as a young, educated, and trainable workforce,” said Catherine Shipushu, senior manager, marketing, branding and communications at Namibia Investment Promotion and Development Board

The country’s strategic location and world-class port make it an ideal gateway to over 300 million people in other African markets. Furthermore, it boasts a strong legal system that protects the rights of investors in that disputes can be settled through the courts or international arbitration,” she said.

The wealth report also revealed that while the number of dollar millionaires in Mauritius and Namibia grew in the last decade, it declined in Nigeria by 30 percent to 9,800.

“The big five wealth markets in Africa together account for 56 percent of Africa’s high-net-worth individuals and over 90 percent of the continent’s billionaires,” it said.

It, however, said that their continued dominance is far from assured, and they could soon be challenged by the likes of Mauritius and Rwanda, which are fast gaining ground. “Namibia’s new residence by investment offering positions it as a future potential rival as well

Some of the factors that make these countries fast-growing markets for millionaires are safety and security, low tax rates, ease of doing business, stability, good investment climate and access to foreign exchange markets.

“All these are ease of doing business policies. Once you have a supportive and collaborative business environment both from the economic and security perspective, it helps to attract investments in those countries. This is why those countries are seeing an increase in the growth of millionaires,” Israel Odubola, a Lagos-based research economist, said.

He said different bottlenecks are affecting private-sector players in Nigeria