Africans in diaspora are Africa’s biggest financiers

Akinwumi Adesina, president of the African Success Bank Group, has stated that because they are the continent’s greatest source of remittances, Africans in the Diaspora are essential for its economic development.

Adesina made this statement during an event titled “Development Without Borders: Leveraging the African Diaspora for Inclusive Growth and Sustainable Development in Africa,” which was organized by the Bank in association with the African Union Commission, the International Organization for Migration, and the African Continental Free Trade Area Secretariat.

Remittances from the African diaspora have increased in value by a factor of two, from $37 billion in 2010 to $87 billion in 2019, and then to $95.6 billion by 2021. However, in 2021, official development support to Africa was just $35 billion, or 36% of remittances from the diaspora. With $31.5 billion and $19.2 billion in remittances received worldwide in 2021, respectively, Egypt and Nigeria rank among the top 10 countries.

The main source of financing for Africa is now the African diaspora. Furthermore, the key to ensuring the security of millions of Africans’ livelihoods is not debt but rather a brand-new type of concessional finance that consists entirely of gifts or grants.

He pointed out that while remittances have aided in addressing the continent’s needs for money, food, education, and healthcare as well as acting as countercyclical sources of funding and social protection, there is still much that can be done to better harness these remittances for the continent’s development.

As sending money to Africa costs twice as much as sending it to South Asia, he emphasized the need to do rid of the “Africa-premium” added to remittances. Additionally, there is a need to seize the enormous potential provided by diaspora bonds. Diaspora bonds are efficient tools for utilizing remittances for Africa’s development.

But despite its enormous potential, just four African nations—Ethiopia, Kenya, Ghana, and Nigeria—have so far issued diaspora bonds, frequently with varying degrees of success. There are numerous chances to use the high, rising, and reliable remittance flow to Africa as collateral to acquire financing for the continent’s businesses.

To encourage investments, particularly for the continent’s infrastructure, African nations should securitize remittances. More than only remittances and investments are available from the diaspora. They possess abilities that can help increase the human capital for Africa’s growth, including knowledge, expertise, exposure to the business and investment world, as well as science, the arts, and technologies. They can act as mentors for the next generation of Africans and contribute to the creation of top-notch educational institutions.

“That is why all governments in Africa should prioritize affairs of the diaspora. African countries should establish ministries of diaspora to give policy priority to the specific needs of the diaspora, as well as expand the investment opportunities for them through special incentives,” he said.

He believes that voting rights should be extended to Africans in the diaspora. They should participate in determining the direction of the economies in Africa if they can send money that fuels their own economies at home. “As Africans in the diaspora, you can look to the African Development Bank to partner with you on this journey to transform Africa,” he noted.

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