Diaspora Contribution Beyond Remittances
Driving Africa’s Development Agenda
India as the world knows, has risen up to be a leading producer of vaccines today and the secret of their success is through their Diaspora, Indian nationals who brought back their skills, knowledge, finances and discretion to take risks in diverse industries like technology, sciences, industrial and chemical, making India a global economic power.
India is known to have Mega and well-equipped hospitals, making the country a destination for global health care, this was also achieved with the government simply providing incentives to Indian physicians in the Diaspora to invest back in India, with fiscal incentives including tax free status, repatriation of profits, relaxation of foreign exchange restrictions, provision of land to build capital projects and in return, give tax incentives to compensate investors.
The Africa Migration Report 2020 estimates that 75 percent of financial remittances received in Africa is used for consumption, including subsistence and housing. The remaining 25 percent is used for socioeconomic production, for which about 10 percent covers long-term goals, such as education and health. In comparison, approximately 15 percent is used for savings and investing in housing, small assets, and other income-generating activities.
The dividends of African Diaspora contribution to the development of the continent should go beyond personal remittance. Diaspora can play a critical role in promoting trade and investment, facilitating bilateral trade and investment between host and origin countries, utilising accessibility to market knowledge, to enhance home country exporters’ knowledge on import policies of goods destination, and meeting market standards. For some biased reasons, and in some cases, reasonable grounds, our agricultural export products are classified as sub-standard in the international market. We can partner with diaspora subject matter experts to produce new crop varieties, especially for food security within the continent, and become self-sufficient by 2050, when the population of the continent will be getting close to 2.5 billion, almost double of where we are today.
With the right policies put in place, and home country business partners displaying astute values, honesty and accountability, diaspora can invest more in their home country, promoting business development, job creation, innovation and business networks. Some African countries are already creating an enabling business environment to attract foreign investment through diaspora. Ethiopia has offered same benefits and right given to domestic investors to the diaspora counterparts, duty exemption on imported goods, and discounted airfares to diaspora development promoters and entrepreneurs. Nigeria has established a diaspora commission to cater for the needs of the country’s diaspora. Other countries such as Ghana, Gambia, Morocco and Senegal all have different incentives given to Diaspora investors, different from what is given to Foreign Direct Investments.
Diasporas have been identified as a resource for research, innovation, knowledge and technology sharing, and with nothing to be done in the nearest future to mitigate the effect of brain drain, then Africa may as well look to its Diaspora for knowledge sharing, and reverse the brain drain.
The new African Continental Free Trade Area (AfCFTA), is another lofty project that the diaspora can help with; AfCFTA is a free trade area encompassing most of Africa, established in 2018 by the African Continental Free Trade Agreement. It is the largest free trade area by number of member states after the world bank, and has its secretariat located in Ghana.
AfCFTA aims at a single market creation for economic trade, distribution of goods and services across the continent, leading to larger trade and investment flows between African countries. Under the agreement, members are committed to eliminate tariffs on most goods and services over 5, 10 or 13 years, depending on the country’s level of development or nature of the products. The agreement will provide jobs and acquisition of new skills for youths among numerous benefits, promote industrialization and diversify exports.
The success of the agreement will depend on sophisticated supply chain system, logistics operations, frictionless travel and real time data management systems, which is impetus to the success of any operation or system for that matter. Once again, diasporas with international expertise will come handy to make this happen.
Africa’s progress towards attaining its Sustainable Development Goals (SDGs) is partly reliant on collaboration with its diaspora. By creating a business-friendly climate, provide incentives and security, develop policies and legal frameworks to protect investments, and ensuring repatriation of funds is not an arduous or near impossible process, will spur a growth in diaspora investments; let’s not forget that the flow of funds in form of remittances and micro investments is already a significant part of the economy of the continent. Therefore, creating an enabling environment will only build trust and boost diaspora confidence to invest in their home countries. It will accelerate the eradication of poverty through business development and job creation. The SDGs goals of No poverty, Zero Hunger, Quality Education, Decent Work and Economic Growth, Industry Innovation and infrastructure, can and will all be achieved through diasporas contributing to brain circulation, research, innovation, knowledge and technology sharing.
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