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In this interview, entrepreneur and financier Toluwalope Oni speaks on the prospects of Nigerian diaspora investing in their home country. He spoke with Jide Akintunde, Managing Editor, Financial Nigeria publications, and Director, Nigeria Development and Finance Forum.

Jide Akintunde (JA): It is about one and half decades since you left your position at one of Nigeria’s top investment banking institutions in Lagos to advance your career abroad. But in this period, you have remained socially and professionally connected to the country. What are your reflections on this experience?

Toluwalope Oni (TO): It's hard to believe it's been 15 years since I transitioned from the world of investment banking in Nigeria. While investment banking offers a rewarding career path, my entrepreneurial spirit has always been strong. After I left FBN Merchant Bank (now FBNQuest), I went to business school in 2009, which provided an ideal springboard for me to explore my entrepreneurship.

Leaving Nigeria presented me exciting opportunities. But the desire to contribute to tackling some of the nation's long-standing challenges remained on my mind.

Fast forward to 2015, I led the acquisition of Portland Bathrooms from UAC, one of the most diversified multinational conglomerates in Nigeria. This was a natural pick for me, as the construction industry has always held a particular attraction for me.

Building businesses in Nigeria presents unique complexities, but the fundamental truth is that lasting solutions require a deep understanding of the landscape and there are few shortcuts. One could, therefore, make mistakes and pay one’s dues.

For us, the constant challenges of customs clearance, inventory and logistics management, and the general costs of doing business make import-dependent businesses quite chaotic – in Nigeria. But despite these pressures, we have managed to extend our offering beyond just bathrooms to a range of solutions from furniture hardware to architectural surfaces. We plan to offer lighting from 2025 when we celebrate our 10th year anniversary.

I was traveling to Nigeria quite regularly, but the pandemic necessitated a recalibration of my travel schedule in light of family commitments. Nevertheless, I have continued to maintain personal and professional connections with my contacts in Nigeria. My angel investing in the startup ecosystem has allowed me to stay at the forefront of innovation in Nigeria, while advising C-level executives on navigating the digital age and sustainable business practices. These provided different avenues for making contributions to the country.

There is a lot going on in Nigeria and elsewhere in Africa. I am a Partner in a venture studio focused on technology-driven advancements in education, sports, and creative industries around the continent. This allows me to contribute to sectors with immense potential for positive societal impact, particularly for young Nigerians. Every day, I am learning from many younger team members I have the privilege to lead.

Bullishness on Nigeria is not mere optimism. The global landscape is evolving, and Africa's influence is undeniable. Our music, food, and culture are increasingly becoming mainstream. Just last weekend (read last weekend of June), our very own Burna Boy had a very successful concert in London. The tickets were sold out more than two months to the event. While challenges persist, the combination of the Nigerian youth's unwavering determination and the diaspora's expertise creates a powerful force that can be leveraged for progress.

JA: The contribution of Nigeria’s diaspora population to the country’s economy is far more recognised through their remittances, which topped $20 billion in 2023. But there are those of you who actively invest in the country despite living abroad. Would you like to speak more on why investing in Nigeria is compelling – for you?

TO: You're absolutely right about Nigerians living abroad making ‘inward foreign investment’ in the country. For me, investing in Nigeria is driven by belief, blended with my risk appetite and a deeper and more nuanced understanding of the market. Nigeria's large and young population offers a vast customer base for businesses with the potential for exponential growth. Some startups in Nigeria achieved over 200% average annual growth over a period of 4 – 5 years. Many sectors in Nigeria remain under-developed, which presents opportunities for innovative businesses to solve critical problems and capture significant market value, create employment, and build substantial new industries.

Generally speaking, however, Nigerian diaspora investors presumably have an inherent understanding of the cultural nuances, consumer preferences, and the business environment, giving them an edge over foreign competitors. Also, our commitment to Nigeria more likely than not extends beyond achieving financial returns. We are genuinely interested in the country's long-term development and, for some of us, a return to the days when Nigeria was well respected around the world.

But for all (prospective) investors in the country, there are compelling opportunities in multiple sectors. Beyond the headlines, there are success stories that underscore the overall positive trends within the economy. But you also have to mitigate risk. Partnering with (or investing in) experienced local players can provide an advantage in this regard.

JA: In the past few years, macroeconomic challenges have complicated investment decisions in Nigeria, especially concerns about exchange rate risks including stalled capital repatriation. While liquidity concerns remain, the Central Bank of Nigeria (CBN) has been trying to fix the policy side of the FX market. Do you feel assured that the country is about to turn the corner on elevated market risks?

TO: Nigeria's macroeconomic challenges, particularly FX issues and capital repatriation concerns, have undoubtedly complicated investment decisions. So, rather than assured, I would say there are reasons for cautious optimism, alongside the need for continued policy improvements.

Based on my observations, the CBN’s efforts are yet to achieve the level of assurance that can turn the corner when it comes to diaspora and international investments, especially given the other headwinds Nigeria faces. There is need for more deliberate actions to improve FX market transparency, curb speculative activity, and increase non-oil exports with the CBN’s initiatives to promote "Made in Nigeria."

Policy focus needs to be on ensuring local manufacturing of the basic needs of Nigerians, local ownership of key industries, and global competitiveness in the industries of the future. We need to diversify the country’s export base, like we have seen in India, China, Turkey, and Brazil.

JA: I already touched on inward remittances, which the CBN has been making policy efforts to unlock. But the engagement of Nigerians living abroad should be more robust given the country’s development needs and the leverage of its diaspora population. What is your view of the importance of the issuance of diaspora bonds, active connection with Nigerians abroad through summits, building a database of Nigerians living abroad like NIDOE is trying to do, diaspora volunteerism, etc.?

TO: Engaging Nigeria's diaspora requires a multi-faceted approach that goes beyond simply unlocking remittances. On financial engagement, issuing diaspora bonds can be a viable option for attracting long-term investments from Nigerians abroad. However, transparency, attractive yields, and clear development goals are crucial for success. I also think regular summits can foster connections, share investment opportunities, and create a sense of community among diaspora Nigerians and the policymakers.

Building a comprehensive and secure database, similar to NIDOE's efforts, can facilitate communication and engagement with diaspora communities, but this is only the beginning.  The strategy around information being shared and the quality and reliability of such information is crucial for sustained engagement. It’s important to lean in fully into technology to effectively galvanise the Nigerian diaspora.

Encouraging diaspora professionals to volunteer their skills and knowledge can significantly contribute to capacity building and knowledge transfer in Nigeria. Attracting diaspora talent is crucial, but it requires a cultural shift within Nigerian organisations. Greater emphasis is needed on investing in employee training, mentorship, and career development opportunities. Competitive compensation packages that recognise and reward talent is equally important, as is modernising work practices, including flexible and collaborative work arrangements. The old ways just aren’t effective anymore and leaders need to be empathetic, demonstrating they value talent by treating them with respect and regard. On human capital, the world is slowly becoming a global village and thanks to technology, Nigeria is increasingly becoming firmly rooted in that ecosystem.  

A more sustainable approach to diaspora engagement requires a strong value proposition, visible progress in ease of doing business, and actively building trust and embedding transparency as normal across all facets of society.

JA: The development partners are actively engaged in the diaspora discussion, with efforts to lower the cost of remittances, support for SMEs, pooling funds for investment, and the provision of investment information is being promoted by national and multilateral institutions. In which of these areas, and others, do you think support can make appreciable impact?

TO: The engagement of development partners in facilitating diaspora investment in Nigeria is a positive step. However, I am wary of an overreliance on development partners to fix even our simplest problems. There is certainly room for support, and I will share my views on how this can be more impactful. However, the future I envision has Nigeria addressing our own issues. We have the knowledge, skills, and experience. What is missing is the relentless will to focus on a united vision for the Nigeria we desire.

I strongly recommend that we focus on sectoral targets with clear metrics for success. Development partners can help conduct or provide access to research that identifies high-potential sectors for diaspora investment, with consideration to factors in alignment with national development priority and diaspora expertise. They can support by developing frameworks to track the impact of diaspora investment, including job creation, economic growth, and social development.

I appreciate the work being done by the development partners to lower the cost of remittances. But some of them can do more by creating diaspora investment funds and promote co-investment opportunities with diaspora investors. They can also provide data-driven platforms for connecting diaspora investors with promising Nigerian SMEs and startups.

Building a supportive ecosystem for mobilising diaspora investment requires a robust framework, where development partners can provide support in the areas of capacity building for diaspora investors, regulatory harmonisation, networking, and mentorship. Showcasing Nigeria's soft power, including culture and products, can be highly impactful. This is also an area that development partners can provide support to Nigeria's creative industries, including film, music, and fashion. They can also partner with diaspora communities to develop marketing and branding campaigns that showcase Nigerian products, art and culture on a global stage.

JA: There are sectoral investment voids being created with the exits of some multinational companies from Nigeria in recent time. Does this create more opportunities for the diaspora to invest – or you are as cautious as the MNCs?

TO:  That’s an interesting question, Jide, and I will answer it more generally without referring to any specific exit transactions. First off, it is important to understand that multinational companies are in Nigeria primarily to make profits that must eventually be remitted to their home countries. The benefit of the investment could be reversed by long-term pressure on the naira as profits are repatriated.

But if the expected profits are in jeopardy, then exits are inevitable. These are investment decisions for MNCs, and an exit often means they cut losses in order to adequately manage the risk in their overall portfolio. This is the reason the government ought to support local ownership in industries. There is an over-reliance on MNCs in critical sectors of the economy. Unless we begin to back local entrepreneurs with the necessary support to create our own successful and big businesses, this cycle will only continue.

I believe it is Nigerians that should primarily be providing jobs for Nigerians. Indeed, these exits create openings for domestic and diaspora investors, but once again government has a role to play in restoring confidence in Nigerians to invest in Nigeria, by providing clear policy direction on the priority sectors for indigenous ownership, simplifying the business environment to make it easier for new investors to enter the market, and enacting policies that encourage local ownership and participation in key industries.

Diaspora investors can play a significant role in bridging the gap left by MNC exits where there is an opportunity to leverage the skills and experience of diaspora entrepreneurs and investors, benefit from platforms created for diaspora investors, and establish a policy environment that incentivises and facilitates diaspora investment.

Overall, the exits present both challenges and opportunities for Nigeria. With a more strategic policy framework, we can begin the journey towards more wealth creation for Nigerians as we have seen in the energy and financial services industries over the last two decades.

JA: Surely, the Nigerian economy requires robust stakeholder support to galvanise it for “sustainable progress” – our umbrella terminology at Nigeria Development and Finance Forum for economic, institutional, social, and environmental sustainability. Still, how can the government and development partners make this happen?

TO: You're absolutely right on robust stakeholder support being essential, and I have some thoughts on how the government can make it happen. The first requirement is having a clear and practical goals with metrics for tracking progress. Building momentum for progress requires anchoring on catalytic initiatives, like "Made in Nigeria" for export markets. This involves a much more collaborative approach than is currently the case. Clearly defined roles and responsibilities are also germane.

The initiatives must embrace sustainability principles and practices, including multi-stakeholder engagement, environmental and social responsibility, and local sourcing – including organic agricultural produce. There is no initiative like this that can thrive over the long term without building trust and fostering accountability.

I should add, based on the questions on the role of the development partners, that as a country we are entering a phase where the role of development partners needs to change. Oftentimes, help breeds dependency and makes it harder to find your own solutions and your own voice. There are signs that Nigerian youth are no longer prepared to be spoken for anymore. They want to speak for themselves and showcase what they can do.  

JA: What investment themes do you think Nigeria can thrive on in the next decade, and what is your outlook for the economy over this period?

TO: Firstly, my thesis stems from Nigeria’s potential to be a major investment success story in the coming decade. The investment themes that I believe Nigeria can thrive on centre primarily around digital transformation. Nigeria's young, tech-savvy population is a perfect asset for this, but we will also need to improve our data infrastructure, fintech and e-commerce eco-system, and embed digital skills development into education right from the elementary level. This central theme unlocks opportunities in virtually all sectors from agriculture to education, healthcare, energy, and even water and sanitation.

Second, we must lean into unlocking the value in non-oil natural resources, through value-added processing, across agriculture and solid minerals (with special attention to lithium, which can position Nigeria well for the clean-energy transition). Moving beyond exporting raw materials to finished products will create jobs and generate higher returns, which will have extensive multiplier effects on the economy. In doing so, particular emphasis must be placed on positioning Nigerian entrepreneurs for ownership in this highly lucrative sector. It would also be necessary for the government to strengthen regulation and supervision in the solid minerals sector in order to adequately mitigate some of the risks and revenue losses that have characterised the industry for several decades.

The third theme is human capital and talent development. In this regard, the country can harness its demographic dividend of having a youthful population across industries in prioritising investment in Sports and STEM education.

Finally, infrastructure investment is required for any thriving economy. The critical areas for infrastructure investment in Nigeria still remain healthcare, education, power and energy, as well as water and sanitation.

Despite all the setbacks on our journey as a country, Nigeria still has the potential to become a major economic powerhouse of the world. Personally, the meetings I have had in recent weeks with global companies such as US EXIM Bank, Afreximbank and L´Oréal all point in the direction of a positive and growing interest in Nigeria.

The Theologian Thomas Fuller’s phrase “the darkest hours are just before dawn” is apt at this time and I speak from a point of personal conviction that Nigeria will see a brighter day.