Africans in diaspora are the continent’s largest financiers through remittances – AfDB President

The President, of the African Development Bank Group, Akinwumi Adesina, has said that Africans in Diaspora are critical for Africa’s economic development as they constitute the continent’s largest financiers through remittances.

Adesina stated this at the event, on ‘Development Without Borders: Leveraging the African Diaspora for Inclusive Growth and Sustainable Development in Africa’ organised by the Bank in collaboration with the African Union Commission, the International Organisation for Migration, and the African Continental Free Trade Area Secretariat.

The AfDB President said: “The value of remittances from the African diaspora doubled from $37 billion in 2010 to $87 billion in 2019, reaching $95.6 billion by 2021. Yet official development assistance to Africa in 2021 was $35 billion, or 36 percent of the remittances from the diaspora. Egypt and Nigeria are among the top-ten remittance recipients globally, with $31.5 billion and $19.2 billion, respectively in 2021. The African diaspora has become the largest financier in Africa! And it is not debt, it is 100 percent gifts or grants, a new form of concessional financing that is the key for livelihood security for millions of Africans.”

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He noted that while remittances have helped to meet financial, food, education, and health needs, as well as serve as countercyclical sources of finance and social protection, much can be done to better tap into these remittances for Africa’s development.

“We must eliminate the “Africa-premium” charged on remittances, as the cost of remitting funds to Africa is twice what it is for South Asia. We must tap the massive opportunities offered by diaspora bonds. Diaspora bonds are effective instruments to harness remittances for the development of Africa. But despite its great potential, only four African countries (Ethiopia, Kenya, Ghana, and Nigeria) have successfully issued diaspora bonds, often with mixed results. Because the flow of remittances to Africa is high, rising, and stable, it offers huge opportunities to serve as collateral to secure financing for African economies.

Africa countries should securitize remittances to promote investments, especially for infrastructure on the continent. The diaspora can offer a lot more than remittances and investments. They have skills, knowledge, know-how, exposure to the world of business and investments, science, arts, and technologies, that can help boost the human capital for Africa’s development. They can help build world class universities, and they can be mentors for the new generation of Africans.

“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. The diaspora should also be allowed to vote. If they can send money that powers their home economies, they should also help decide the future of the economies of Africa. As Africans in the diaspora, you can look to the African Development Bank to partner with you on this journey to transform Africa.”