As the world seems to be tending towards recession due to the ravaging coronavirus disease, which has crippled many economies, wealthy Nigerians are reportedly buying passports for cash from many Caribbean countries.
Read the Full report by QZ.com Below:
A year ago, the office of Citizenship by Investment Program (CIP) in the small Caribbean island nation of St. Lucia had received no applications from any Africans in its nearly five years of operations.
But in the past few months, it has issued up to 60 passports to Nigerians and is reporting steady increases in applications from the country—still its sole African market.
That sharp rise reflects spiking demand among Nigeria’s wealthy private citizens who are increasingly tapping into “investment migration” programs offered by foreign countries. The programs allow foreign nationals 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 programs 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 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,” says Paddy Blewer, public relations director at Henley & Partners. “What you have is a community of wealthy individuals who cannot travel without visas.”
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.
For instance, St. Lucia’s lowest-priced program, 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.”
Other Caribbean islands including Dominica as well as St. Kitts and Nevis also offer investment migration programs with minimum costs of $100,000 and $150,000 respectively, a lot less than similar European programs 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.
