Tomi Davies (TD)
Tunde wants to help his sister expand her commercial laundry in Ibadan. He works in Manchester. She has two hotel customers and needs another washing machine, reliable water storage and a delivery van. He can put money in. What he cannot do is leave his job whenever a machine breaks or a customer delays payment.
This is an illustrative example, not a portfolio story. Tunde knows his sister works hard. He remembers their mother washing clothes by hand, and he likes the idea of building something that employs people at home. Before he transfers anything, however, they need to agree what his money is meant to do and what each of them is taking on.
Why ask this now?
On 6 November, the Nigerians in Diaspora Commission announced its investment summit for 10 and 11 November, with trust between diaspora investors and opportunities at home as its theme. Its announcement emphasises reliable information, institutions and investor protection. That’s a useful starting point. An announced programme does not establish that investments have been completed or that their safeguards work. [1]
For Tunde, the question is smaller and more immediate. Can he and his sister put an arrangement around this laundry that still works when the first difficult month arrives? That’s the infrastructure I want us to examine: the people, agreements, records and routines that allow capital to be used responsibly.
Agree what the money is
Start with the conversation families often leave unfinished. Is Tunde giving his sister money, lending to the business or buying a share of it? If he expects repayment while she thinks he is helping her get established, they can both act honestly and still end up disappointed.
His sister needs room to explain what the laundry can afford. A machine may last years, but hotel invoices may remain unpaid for weeks. A repayment promise based on sales rather than cash received could put wages under pressure. An ownership stake brings a different conversation about decisions, distributions and how Tunde might eventually leave.
The right structure depends on the business and the people involved. They should get appropriate advice on the agreement and cross-border requirements before committing. For now, each should be able to explain the proposed arrangement in ordinary language. If their explanations differ, the transfer can wait.
Sentiment has a legitimate place here. Tunde may willingly accept a longer wait because the business matters to him. He may choose to make a gift. What matters is that he makes that choice consciously, with money he can afford to commit, and his sister understands it too.
Put somebody close to the work
Tunde suggests asking a cousin in Ibadan to keep an eye on things. His sister asks what that means. Will the cousin inspect equipment, approve spending, advise her or report to him? A helpful relative can become an unofficial manager surprisingly quickly.
Choose the person for the work required. An accountant could reconcile collections and costs. A technician could assess the machine and its maintenance needs. Neither automatically has the authority to direct staff. Agree access, payment, reporting and conflicts of interest. If the cousin sells the equipment, Tunde needs somebody else to check the purchase.
Local stewardship should help the sister run the business and help Tunde understand it. It should not require her to seek permission from Manchester before handling an ordinary customer complaint. Decide which matters she controls and which changes need discussion, such as taking on another loan or spending the equipment budget elsewhere.
Follow the money into the work
Now use the POEM Framework® to examine the expansion. The vision is a dependable laundry business. The Proposition is clean linen returned when hotels need it. Organisation includes collection routes, trained operators and somebody who can repair the machine. Economics means knowing what remains after water, power, wages, delivery and maintenance. Milestones show whether the expansion is improving that business.
Before buying the van, check whether delivery is actually the constraint. Perhaps the hotels would send more work if turnaround improved. Perhaps the existing machine sits idle while the laundry waits for water. More equipment can increase costs without solving the problem that limits sales.
Agree where the investment goes, who receives it and what confirms delivery. Keep business spending visible in the business records. Allow for exchange costs and changes in equipment prices. If the available money buys less than expected, revise the plan together rather than quietly dropping maintenance or working capital.
Stay involved after the transfer
Tunde does not need a daily photograph of a washing machine. He needs a short account of completed work, cash collected, operating costs, overdue invoices and problems requiring attention. His sister needs to know when he will respond and what help he can realistically provide.
They might review these together every month and agree which problems need an earlier call. If a hotel stops paying, somebody must speak to the customer, adjust the cash plan and decide whether to continue serving it. A dashboard can show the overdue invoice. It cannot have that conversation for them.
There is a limit to how much machinery a small investment can carry. Paying several intermediaries to supervise one washing machine could consume the benefit. Start with proportionate checks and named responsibilities. Add complexity when the amount, risk or number of investors justifies it.
What could still go wrong?
Formal arrangements do not remove commercial or political risk. Writing for the World Bank in 2011, Sonia Plaza described weak initial sales of Ethiopia’s first diaspora bond and concerns about repayment capacity, the government guarantee and political risk. That historical account concerns a different instrument and setting. It is a warning against assuming that a formal offer, promoted to people with ties to home, will necessarily attract their money. [2]
Our laundry can have sound records and still lose a hotel customer. A trusted local adviser can be mistaken. Tunde can need his money sooner than he expected. The arrangement should make those difficulties visible and manageable; it cannot promise they will never happen. This is practitioner judgement, not a finding from my ongoing research into diaspora investment and trust.
Tunde can also contribute something beyond oversight. His experience organising delivery schedules might help his sister compare routes, provided she wants that help. He should agree a specific task and finish it. Promising access to customers, expertise or suppliers is useful only when somebody follows through. She should be able to plan around his contribution without repeatedly chasing him for it.
Try the difficult-month test
Before transferring money, Tunde and his sister should each write down what happens if the machine fails and the largest hotel pays late in the same month. Who acts first? Who can authorise repairs? Which bills get paid? When does Tunde hear, and what can he reasonably expect next?
Compare their answers. Then ask the local person they have chosen to describe their own part. Any disagreement identifies work to finish before the money moves. The aim is to give Tunde’s commitment a practical form his sister can use, so both know what support, responsibility and patience will mean when the laundry needs them most.
I trust that helps!