MPC reiterates call for issuance of diaspora bonds to boost forex supply

The Monetary Policy Committee at its last meeting resounded its earlier advice to the Federal Government asking it to issue diaspora bonds to citizens abroad. In May, the MPC asked the government to bank on the patriotism of its citizens in diaspora to issue bonds. The committee had said that despite the public debt stock of the country, diaspora bonds were likely to conveniently pay themselves back.

In July, the MPC said that diaspora bonds would improve the state of poor infrastructure in the country. The committee also made a plea to the government to increase its investment in public infrastructure. It said, “(The) members further noted the contribution of poor infrastructure to rising domestic price levels, re-iterating their call to the Federal Government to prioritize investment in public infrastructure such as improved transportation networks, power supply and telecommunication facilities.

“Funding for such projects, the Committee noted, could be sourced through Public-PrivatePartnerships, as well as the issuance of diaspora bonds. It emphasized the complementary role these bonds would play to boost foreign exchange supply, improving accretion to reserves and easing the exchange rate pressure.” The MPC also said that the performance of the stock market was sustaining investor’s confidence despite the decline in market indices. The stock market has seen a sustained decline in market capitalization and its AllShare Index over the past few months but the MPC maintains that it is doing fairly well. It said, “Notwithstanding the moderate decline in market indices, the Committee noted that the equities market remained in a good place, indicating sustained investor confidence in the Nigerian economy.”