Nigerian banks can create Diaspora bonds as a financial tool to bridge financing gaps in the country, Ms. Vicky Johnston, Senior Regional Director, Middle East and Africa, Moneygram International, recently said.

Johnston said in an interview with the News Agency of Nigeria on the sidelines of the Banking Outlook Africa conference 2010.

She stated that Nigeria, with $10bn annual remittances, was well positioned to develop Diaspora bonds to stimulate its economy.

“Diaspora bonds are a mechanism whereby developing countries can borrow from their diaspora community abroad to raise financing,” she said.

She noted that official aid alone was not adequate to bridge the financing gaps in developing countries

Johnston said that Nigeria was one of the highest receivers of remittances in sub-Saharan Africa and should utilise this for economic development.

“It is being done in Ethiopia and Rwanda at the moment and not many other countries are utilising it around the world, but it could be an interesting thing for the Nigerian market,” Johnston said.

Shedding light on the bonds, she said it was developed when the community of the Diaspora abroad provided money as a source of funds or capital that could be used to help in the financing gaps.

She said, “In other words, we are using the Diaspora abroad who have their natural links to their home country of Nigeria, to bridge financing gaps.Read more here