Heightening economic uncertainties in Nigeria is causing a spike in property investments abroad not just by wealthy Nigerian citizens, who have traditionally explored this option, but by members of the middle class using the opportunity to obtain citizenship in foreign countries.
Investment in land and properties is popular worldwide for obvious reasons. Shelter is a basic need of mankind, a profitable investment venture and a core requirement for production. Several (relatively small) countries looking to attract foreign investments into their real estate, hospitality and tourism sectors are using property investment opportunities with the added benefits of fast-tracked residency or citizenship status for investors as bait for high net worth foreign nationals, mainly from the African and Asian continent.
Nairametrics found that at least 22 countries across the world have Citizenship by Investment (CBI) programs that offer foreigners citizenship or permanent residency after they have invested in real estate and Nigerians who can afford these offers are actively subscribing to them.
Why they are doing it?
Emmanuel Abiodun, a Nigerian who bought a home in Canada, told Nairametrics that he purchased the property in 2018 with the hope of increasing his chances of securing Canadian citizenship.
Abiodun, who works with one of the Tier 2 banks in Nigeria, explained that he thought he could earn Canadian citizenship just by buying a property but later found that his agent misled him.
“When I realised that becoming a Canadian citizen by investing in property will not work because the Canadian government is sensitive to money laundering, I opted to invest in the government bond under the Quebec Immigrant Investor Program (QIIP) to achieve the same purpose.
“Despite that, I still earn an average of $2,347 from each of my (2) 1 bedroom flats in Toronto every month. I also earn the same from another apartment in Brampton. Although my main goal has not been achieved, it still makes lots of sense to invest in property over there, as the returns go a long way for me.”
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In the case of another Nigerian, Olugbenga, who owns property in Greece, he decided to invest in the country to secure a five-year residency.
The politician subscribed for the Greek golden visa programme while working as an aide to one of the South West governors in 2016.
According to him, the program, which was launched in July 2013, grants a five-year residency visa in return for an investment in real estate.
He said, “There is no minimum stay requirement and children up to the age of 21 are included in the family application. With £500,000 worth of property, the visa is granted for five years and renewed every five years if the property investment is retained.
“It is not compulsory for me and my family to live in the country in order to retain and renew the investor visa but citizenship can only be granted after seven years of residency. If things don’t work as planned here, I will use that as an alternative to explore opportunities abroad.”
What you should know
CBI is gaining more patronage from Nigerians and has become a viable plan B for many, affording them the opportunity to relocate and/or earn returns from their real estate investment or government bonds.
Though the COVID-19 pandemic forced most countries to shut their borders, these borders have since been reopened, as the third wave has not stopped them from accepting funds from the diaspora to boost their real estate sector.
Some countries that Nigerians target are Malta, Portugal, Germany, Ireland, Turkey, Austria, China, Russia, Lebanon, Middle East (UAE, Qatar), India, South Africa, Vietnam, Brazil and Greece among others.
For instance, in 2020, the UAE launched a permanent residency scheme, which provides a soft landing for real estate investors to encourage expatriates to invest in property and settle in the Gulf nation.
The UAE Prime Minister Sheikh Mohammed bin Rashid Al-Maktoum explained that the innovation is open to investors and “exceptional talents” such as doctors, engineers, scientists, students and artists.
He said, “Having a total investment of not less than AED 10 million in some sectors, on condition that the investment in sectors other than real estate is not less than 60 per cent of the total investment.
“The UAE already offers long-term visas valid for five to 10 years to property investors, entrepreneurs and people with exceptional talents without the need for a local sponsor. A minimum investment of $13,61,225 is needed to obtain a five-year visa, and double that amount is necessary for a decade-long visa.”
Malta offers an option to buy property either through citizenship (EUR 1 million) or residency scheme (EUR 350,000). For citizenship or residency in the EU Schengen area through Malta, the processing time is 16 months (citizenship) and three months (residency).
In Portugal, the purchase of EUR 450,000 property (home, apartment, or villa) qualifies an individual for permanent residency in the EU member nation. Citizenship is obtained after seven years of uninterrupted living through the golden visa programme.
Statements from local promoters of these CIB schemes in Nigeria have shown that they have high patronage among politicians, top-flight businessmen and industrialists, as well as members of the upper-middle class.
What experts are saying about CBI
Kayode Adelegan, a Real estate practitioner, explained that hundreds of Nigerians (middle and upper class) have made series of enquiries from him and in some cases have paid handsomely to get information on ROI in the real estate sector of foreign countries.
He said, “The most sought after among the nations are Canada, Portugal, Brazil, Malta, and UAE among others. Most of the clients are doing it to secure their children’s future as the situation of the Nigerian economy leaves one with little hope.
“Between January and July, I have done 10 valuations for some clients for the purpose of applying for resident permits across different nations. Some had sold their property in Lagos and Abuja to raise money for such investments.”
The immediate past Chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos chapter, Dotun Bamigbola explained that some people prefer these foreign countries because they have critical real estate investment data like the property index and ROI information readily available for investors.
“It is easier to make an investment decision. The process is not cumbersome and there is easier access to registered property and exchange of interest in real estate, unlike what is obtainable in Nigeria.
“Before now, it has always been the U.S, Dubai and Ireland that were countries of choice but with the tightening in the economy, Nigerians are considering smaller countries with cheaper CBI offerings through the real estate route.”
The growth in the number of Nigerians in the diaspora is both good and bad for the country. Good because it would ordinarily mean more remittances from these individuals which ultimately counts when calculating foreign cash inflows into the country. Bad because these nations are largely courting highly skilled Nigerian professionals, creating a vacuum in various sectors.
In the healthcare sector, for example, it is estimated that there are 4 doctors for every 10,000 Nigerians, a grave shortage by all estimations, further being worsened by the readiness of many of these doctors to pack up and relocate at the slightest opportunity. This trend is also very pronounced in the engineering and IT sectors.
It behoves the government to become more proactive about fixing the economy and creating the necessary incentives to keep Nigerians in their country as the adverse impact of the loss of Nigerian professionals to foreign nations could become critically obvious in a few years from now.