Strengthening Economic Ties with Overseas Pakistanis
The Roshan Digital Account (RDA) continues to be a game-changer for Pakistan’s economy, attracting $9.34 billion in total inflows by December 2024. Launched in September 2020, the initiative has provided non-resident Pakistanis (NRPs) with a seamless platform to invest and contribute to their homeland’s financial system.
Out of the total inflows, 63.3% ($5.91 billion) have been deployed locally in sectors like Naya Pakistan Certificates (NPCs), real estate, stock markets, and other ventures, while 18.2% ($1.7 billion) has been repatriated abroad. The remaining funds, amounting to $1.73 billion, represent a net repatriable liability, highlighting the growing engagement of overseas Pakistanis with this initiative.
Key Investments through RDA
Since its launch, the RDA has recorded $1.27 billion in net investments, with the funds allocated as follows:
- $748 million invested in Islamic Naya Pakistan Certificates (NPCs).
- $460 million in conventional NPCs.
- $59 million in Roshan equity investments.
- Other liabilities account for $39 million, while balances in accounts stand at $425 million.
Driving Confidence Among Overseas Pakistanis
According to Ali Najib, Head of Equity Sales at Insight Securities, the RDA’s success is driven by its attractive features, including high returns on NPCs, tax incentives, and Sharia-compliant options. The fully digital process, backed by seamless repatriation and government trust, has further boosted investor confidence.
“The RDA is not just a financial platform but a significant indicator of trust among the Pakistani diaspora in the country’s financial system,” said Najib. He also emphasized that global inflation and low returns abroad have made RDA’s offerings highly appealing.
Economic Impact of RDA
A report from AHL highlighted that 63.3% of RDA inflows have been effectively utilized within Pakistan’s local economy, driving domestic economic activities and investments. Meanwhile, the 18.2% repatriation reflects the RDA’s flexibility, as funds can be withdrawn without restrictions.
This initiative has also played a critical role in bolstering Pakistan’s foreign reserves and ensuring macroeconomic sustainability. However, continued trust from NRPs and the promotion of long-term investment avenues will be vital to sustaining momentum.
Trends and Future Prospects
Historically, RDA monthly repatriations peaked in mid-2022 but have since shown a gradual decline. Despite this, cumulative inflows and the net repatriable liability have grown steadily, reaching $1.73 billion by the end of 2024.
The steady growth in funds utilized locally underscores the initiative’s potential to stimulate economic growth. Moving forward, ensuring transparent governance, diversified investment products, and economic stability will be critical to retaining the confidence of overseas Pakistanis and maximizing the long-term benefits of this landmark program.
