Securing Your Finances for Your Relocation 'Japa' Plans

“Everybody wants to japa”. For the past 4 years, this statement has been a constant refrain in the lives of most Nigerians. You and everyone you know are probably in the process of japa, planning to japa, aspiring to japa, or thinking of reasons not to japa - for now (lol). For the non-Nigerians who may be lost, “Japa” is a slang derived from the Yoruba language that means “to run, flee, or escape.” It is used to describe Nigerians leaving the country for good to start a new life in a country where they believe their lives and assets are better secured, with better access to rewarding jobs acquired primarily through merit. That and the accompanying improvement of their standard of living through functional infrastructure, and many more benefits.

‘Japa’ is not a New Concept

Just as it has been a major aspect of the story of humanity, migration has always been part of Nigerian history. As a former British colony, our best and brightest were usually sent abroad to better learn ‘civilised’ ways. The idea was that they would come back and apply their newfound knowledge for the betterment of the nation. Today, migration is primarily seen as a means to improve one’s living standard and escape the many challenges facing their home country. Japa has become so prevalent that a recent survey by Philips Consulting states that 52% of Nigerian professionals are considering migration. This Japa rush has left people scrambling to leave the country for greener pastures and in some cases, irrational financial decisions may end up being made in that pursuit. I would like to consider and proffer recommendations on how best to safeguard your assets and finances before, during, and after japa.

?Pre-Japa:

● Determine your budget for the process: Relocation is a cost-intensive endeavour. To ensure that you’re not aimlessly burning through funds, create a reasonable budget for everything involving your migration; From applying for a passport (If you don’t already have one) all the way to a 3 to 6 month estimate of living expenses when you reach your new home country. Make sure to also create an emergency fund to account for unforeseen expenses because trust me, there will be a few of those.

P.S. Tempting as it may be, avoid selling off your worldly possessions in a firesale and understand that the proceeds of selling your assets may not come through until you?are in your new home country.

● Create an emergency fund: An important step in having a successful relocation is having an emergency fund. This is cash you have stored to prepare for any unexpected expenses. You can start small according to your situation but I would advise you to have saved enough to cover potential costs like medical bills (especially if you intend to travel with your young children), insurance deductions, living expenses, etc. Depending on how much your emergency fund is, this could also help your visa application’s proof of funds section. Also, be sure to research the potential expenses awaiting you in your new home country. No two countries operate the same. One may offer accessible jobs, another may offer subsidised or free healthcare. Learn the intricacies of your new home country so you can better tailor the use of your emergency fund.

● Research Taxation: There may be greener pastures abroad but all that green comes with taxes. This is a significant bottleneck for migrating Nigerians as Nigeria is not currently as stringent on taxes as most other countries. Ensure that you look into and understand the complexities of the tax systems of your new home country. Also keep in mind that as a migrant, both countries’ taxation applies to you. I would recommend that you consider speaking to a tax expert to find any tax breaks or reliefs that apply to you and your assets, both in your old and new home country.?

● Keep track of the exchange rates: If you still have assets to liquidate or a business to operate in your old home country, make sure to learn the slight complexities of exchange rates. Depending on your transaction, the smallest of differences in rates can lead to very different results. Exchange rates are constantly changing. You have to constantly stay updated to know the accurate rates.

Japa:

● Secure Healthcare and Insurance: These are two vital financial concepts you must get acquainted with. For one, insurance is needed to protect any assets you are leaving behind. In case of any future crisis further escalated by your absence, insurance will at least cover a portion of your investment. It also lessens the strain of the Japa process. This is where healthcare insurance comes in. A solid healthcare insurance plan will mitigate the impact of any possible medical issues during your travel process. All you need to do is find insurance coverage that fits your budget and applies to both Nigeria and your new home country. You can also secure additional help against theft and non-health crises through travel insurance.?

● Do not close your old bank account: I can understand the desire to close your local accounts because “Nothing is bringing me back to this country” but don’t make a hasty decision. Eventually, you may have a reason to come back or engage with your old home country. That bank account would be a useful place to store emergency funds. I would advise that in addition to maintaining a domiciliary account with a bank to mitigate fluctuating exchange rate issues, you also go a step further to sweep those funds to a dollar-denominated investment outlet where returns on the same would be generated.??

Post-Japa

● Set up a local bank account once you arrive: This should be one of your first actions in your new country. A bank account is a crucial part of functioning in any society. Some countries may allow you to set up a new account from outside the country but most would require you to apply in person or once you are settled, as banks may need a local address when setting up an account.?

● Live within your means within your country: Now that you are settled, please note that your new home country’s currency is no longer foreign currency. Exchange rates do not apply to your expenses. As a new migrant, you may tend to go overboard as you start to earn in your new currency but please remember, exchange rates only apply if you are sending money back home to Nigeria.?

● Use a reliable transfer service to move money between international accounts: Once your local bank account is set up, you may have reasons to perform transactions with your old home country. You may have dependents to take care of, assets that require maintenance or a thriving business to maintain. A transfer service would make such international transactions easier to deploy than regular banks. The only downside is the higher exchange rates they incur. You will have to look into your options and find what works best for you.

● Diversify your financial portfolio: You have made it to a new place that opens you up to a host of new options. Look into the financial instruments, assets, and investment options available to you. Compare the possible returns, risks, and fees related to each option to determine what best fits your financial goals and risk tolerance. You may also diversify your investments across different asset classes, such as stocks, bonds, real estate, and commodities. Diversifying will help reduce your overall investment risk and ensure that your financial portfolio is balanced.

If you are able to employ these steps as you go through your relocation process, you’ll be in a better place than most other migrants.?

Good luck on your journey to another land. I hope you find that which you seek!

PS: If you already left on the japa train, let’s discuss how it affected your finances and how you tried to secure it with any of the above or maybe I haven't even mentioned it here. You may just help the next migrant!

To your wealth and good fortune!