Investment migration: Wealthy Nigerians boost $3bn industry with traffic to Caribbean Island

The decline in standard of living and an unimpressive return on investment prospect in Nigeria has again been accentuated by a report that wealthy Nigerians have started buying their way into the citizenship of St. Lucia, a small island in the Caribbean.

According to the report by Quartz Africa, the office of Citizenship by Investment Program (CIP) of St. Lucia, which had no application from Africa in the last five years of its operation, has suddenly been invaded by Nigerians with the intention of relocating their families to the tiny island,

The report said in the past few months, CIP had issued up to 60 passports to Nigerians while also reporting steady increases in applications from the country, which till now is still its sole African market.

Henley & Partners, the firm that brokers the deal, has an office in Lagos is only the third in Africa, in addition to offices in Cape Town and Johannesburg opened six years ago.

The report noted: “That sharp rise reflects spiking demand among Nigeria’s wealthy private citizens who are increasingly tapping into “investment migration” programmes offered by foreign countries. The programmes allow foreign nationals to obtain fast-tracked citizenship and passports or permanent residency permits in exchange for specified amounts of cash investments.

“The payment for the passports can come in form of direct “contributions” to the development funds set up by the national governments or through investment in real estate projects which offer the promise of not just passports but also possible profits.

“With around 40,000 passports believed to have been issued through investment migration programmes globally, citizenship by investment is now estimated to be a $3 billion industry. It is often favored by high-net worth individuals from countries with “weak” passports, often from countries in sub-Saharan Africa and some Middle Eastern countries.

“What you have is a community of wealthy individuals who cannot travel without visas.”

Henley & Partners, the world’s largest investment migration consultancy, has also set up shop in Africa’s largest economy after seeing a sharp rise in demand from the country over the past three years. The office in Lagos is only Henley & Partners’ third in Africa, in addition to offices in Cape Town and Johannesburg opened six years ago.”

The Public Relations Director at Henley & Partners, Paddy Blewer, was quoted as saying “the reason we opened in Nigeria is because we saw significant potential in the market with growth in private wealth without global mobility for high net worth individuals.

“What you have is a community of wealthy individuals who cannot travel without visas.”

With specific reference to the low rating of Nigerian traveling documents, the report added: “That reality is best captured by the weakness of Nigeria’s international passport. In fact, Nigerian passport holders can visit two fewer countries now than they could in 2010 without first obtaining a visa.

“The country also suffered the worst decline in passport power over the past decade, according to rankings on the annual Henley Passport Index.

“But even paperwork-intensive visa application processes have also gotten more complicated for Nigerians. Under the Trump administration, for example, US visa application fees for Nigerian applicants have been increased, an interview waiver process for visa renewals for frequent travelers has been indefinitely suspended while a ban has also been placed on issuing immigrant visas to Nigerians. The net effect of these restrictions resulted in Nigeria recording the largest global drop-off in visitors to the US last year.

“In search of improved international mobility, investment migration programs by Caribbean nations offer wealthy Nigerians and other citizens a legal and established workaround that ticks two crucial boxes: price point and access.”

For instance, St. Lucia’s lowest-priced programme, a “contribution to the national economic fund,” costs $100,000 for individuals and $140,000 for a family of four, as well as $15,000 for each additional family member.

“That pricing model has really resonated well with the Nigerian community,” says Nestor Alfred, chief executive of St. Lucia’s CIP office.

“A lot of our Nigerian applications consist of families,” he added.

The report went further to indicate that other Caribbean islands including Dominica as well as St. Kitts and Nevis also offered investment migration programmes with minimum costs of $100,000 and $150,000 respectively, a lot less than similar European programmes typically cost. The US program issues permanent residence permits in exchange for investment ranging from $500,000 to $1 million.

But in addition to relative affordability, passports of Caribbean island nations also rank much higher than Nigeria’s on a global scale. For instance, St. Lucia passport holders have visa-free and visa-on-arrival access to 145 countries—more than triple Nigeria’s figure. And for extra context, St. Lucia passport holders’ visa free access allows them into the entire European 26-country “Schengen” area, the UK, and Switzerland.

Reflecting on the Covid-19 battered Nigerian oil-dependent economy which is also exposed to a worst recession in three decades, the report observed that there were a few indications interest in investment migration from Nigeria would slow down.

“Nigeria and South Africa dominate demand from Africa and currently account for 85 per cent of Henley & Partners’ business on the continent, with Nigeria growing rapidly with an interest in Caribbean-based citizenship programmes.

“That momentum will likely remain fueled by Nigeria’s super-wealthy with the country’s population of people with a net worth of more than $30 million—currently at 724 people—forecast to grow by 13 per cent in the next five years.

“But as it turns out, interest in emigration is not restricted to Nigeria’s super-wealthy alone. Over the past three years, middle-class Nigerians have also increasingly emigrated through skill-based programmes offering legal pathways to residency and citizenship in Canada and Australia. In the last five years alone, the number of Nigerian immigrants issued permanent resident permits in Canada has tripled.

“One distinction, however, is that high net-worth individuals who have earned most of their wealth locally are typically simply looking to boost their mobility options rather than permanently relocate. “We’re dealing with people whose businesses and largely their wealth is derived from Nigerian investment—they’re not going to leave permanently,” says Blewer. “This is about being able to go where they want at the drop of a hat. It’s not about leaving Lagos,” the report said.

Despite the mouth watering amount involved, the programme, however, places premium on due diligence just to be distanced from the type that trailed Nigeria’s embattled e-Minister of Petroleum Resources, Deziani Allison Maduekwe, who was reported to have been issued A Dominican Republic’s diplomatic passport.

“The scrutiny from such scandals amplify why investment migration programs claim to place a premium on due diligence. Even though it’s not legally required to, Henley & Partners says it carries out client verification processes, covering sources of wealth, and criminal history.

“We’re not interested in persons involved in military, government officials, or politically exposed persons. Our interest is more in executives and young professionals,” Alfred tells Quartz Africa. As such, the increased applications from Nigeria being primarily from private business executives across sectors, including banking, is ideal for St. Lucia because “it’s easier for us to determine the source of funds,” Alfred says.

It noted further that for tourism-based economies in the Caribbeans, investment migration programmes offered a significant alternative to receiving foreign direct investment. And as recent history shows, with Covid-19 paralysing global travel and tourism, the revenue diversification opportunities these programs offer can prove vital. Indeed, after Hurricane Maria devastated Dominica in 2017, the government sought to shore up tourism deficits by reducing some of its processing fees to make its investment migration programs more attractive and in turn, provide much-needed funds to rebuild and boost the local economy.



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