Encouraging Diaspora Remittances and Understanding the Quiet Period

Feranmi Olaseinde

Feranmi Olaseinde

Sep 30, 20233 min read

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Encouraging Diaspora Remittances and Understanding the Quiet Period

In today's interconnected world, the flow of money and information is essential for the growth and development of economies. This article explores two seemingly unrelated topics - encouraging diaspora remittances and understanding the quiet period. While these subjects may appear distinct, they share common points that shed light on the importance of transparency, objectivity, and value creation.

Diaspora remittances, the money sent by individuals living abroad to their home countries, play a vital role in boosting economic growth. These funds serve as a lifeline for many families, supporting basic needs, education, healthcare, and even investments. However, attracting more diaspora remittances requires an enabling environment that instills confidence in investors.

One crucial factor in encouraging diaspora remittances is the exchange rate. In the past, individuals sending dollars to Nigeria faced significant discrepancies in the exchange rate, which negatively impacted their returns on investment. However, the unification of the exchange rate for the dollar is seen as a positive step. This unification ensures that investors receive greater value and higher returns on their investments in Nigeria. For instance, if someone sends $1 million home and is able to get N700 million in return, they experience a substantial increase in their investment's value.

The concept of value creation is also relevant when discussing the quiet period, which is a pre-IPO embargo on promotional publicity mandated by the U.S. Securities and Exchange Commission (SEC). During this period, company management and marketing teams are prohibited from making forecasts or expressing opinions about the value of their company. The purpose of the quiet period is to preserve objectivity and prevent the dissemination of insider information to select investors.

By implementing a quiet period, regulators aim to ensure that all investors have access to the same information and opportunities. This fosters an environment of fairness and transparency, which are essential for attracting investors and fostering trust in the market. Furthermore, the quiet period helps prevent market manipulation and promotes long-term value creation.

While diaspora remittances and the quiet period may seem unrelated, they both highlight the significance of creating an environment that promotes value and transparency. Investors, whether sending money back home or considering investing in an IPO, seek opportunities that offer favorable returns and minimize risks.

To encourage more diaspora remittances and uphold transparency, governments and financial institutions can take several actionable steps:

  • 1. Streamline exchange rate policies: Unifying exchange rates and maintaining stability can attract more diaspora investments. Clear and consistent policies provide confidence to investors and ensure a fair playing field.
  • 2. Enhance financial literacy programs: Educating individuals in diaspora communities about investment opportunities and the potential benefits can encourage them to send remittances towards productive investments. Financial literacy programs can empower individuals to make informed decisions and maximize the impact of their remittances.
  • 3. Strengthen investor protection measures: Robust regulatory frameworks that safeguard investor rights and prevent market manipulation are essential. By enforcing strict regulations, governments can instill confidence in both local and international investors, leading to increased diaspora remittances and overall market growth.

In conclusion, the relationship between encouraging diaspora remittances and understanding the quiet period lies in their shared focus on value creation and transparency. By implementing policies that unify exchange rates, educating individuals about investment opportunities, and strengthening investor protection measures, governments and financial institutions can attract more diaspora remittances and foster a conducive environment for long-term value creation. Ultimately, these efforts contribute to the growth and development of economies, benefiting both investors and the broader population.

Resource:

  1. "Expert: How FG can encourage more diaspora remittances | TheCable", https://www.thecable.ng/expert-how-fg-can-encourage-more-diaspora-remittances/amp (Glasp)
  2. "Quiet Period: Definition, Purpose, Violation Examples", https://www.investopedia.com/terms/q/quietperiod.asp (Glasp)

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