Last week, the House of Representatives approved a request by President Buhari for the increase in the size of the diaspora bond to $300m from $100m, with the money raised from the international market. To be sold to Nigerians living abroad, money raised from the sale of the bond will be used to fund government infrastructural projects.
On September 29 last year, President Buhari had written both chambers of the National Assembly, requesting the increase of diaspora bond. With the approval of the increase, there will be less pressure on the federal government to resort to external borrowing to fund its infrastructural projects.
Honourable Abike Dabiri-Erewa, the senior special assistant to the president on diaspora and foreign relations, said that the bond will give opportunities to patriots to actively engage in the welfare of their loved country Nigeria. She then encouraged all Nigerians in the diaspora to take advantage of the diaspora bond.
According to Hon Dabiri-Erewa the bond has a five to 10 year maturity rate and annual dividends of between 5% and 8%. She added that this is way more than bank deposit and certificate of deposit returns which about 2%, so the diaspora bond is a plus for patriotic investors.
Dr Abraham Nwankwo, the director-general of the Debt Management Office (DMO), said the bonds are tax exempted, implying bigger income for the investor. He added that the bonds also provide an alternative investment to equities, real estate and bank deposits.
He noted that bonds can also be used as collateral for borrowing from banks and discounts houses and bonds can be sold either through any of the 21 PDMMs licensed by the DMO or on the floor of Nigerian Stock Exchange. Nigeria's diaspora bond was first muted by former finance minister Dr Ngozi Okonjo-Iweala in 2012.
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