As the African diaspora continues its growth, agencies are seeking ways to tap into this vast demographic to help with the continent’s development. Remittances from millions of Africans scattered across the globe have been hailed for sustaining local economies, but a new initiative is aiming to form upscale diaspora investments for longer-term economic development. In […]
People queue outside a bank where they access diaspora remittances in Bulawayo. Credit: Ignatius Banda/IPS
By Ignatius Banda
BULAWAYO, Zimbabwe , Jul 24 2024 (IPS)
As the African diaspora continues its growth, agencies are seeking ways to tap into this vast demographic to help with the continent’s development.
Remittances from millions of Africans scattered across the globe have been hailed for sustaining local economies, but a new initiative is aiming to form upscale diaspora investments for longer-term economic development.
In June 2024, the International Organization for Migration (IOM) partnered with the African Development Bank and the African Union Commission (AUC) towards the implementation of a USD5.2 million project.
According to officials, the fund aimed at eight African countries will “strengthen investment, human capital and philanthropic engagement from the diaspora in eight African countries.”
Most diaspora remittances in Africa go directly to beneficiary families to support anything from buying food to school fees.
The Streamlining Diaspora Engagement to Catalyze Private Investments and Entrepreneurship for Enhanced Resilience’’ (SDE4R) project will help The Gambia, Liberia, Madagascar, Mail, Somalia, South Sudan, Togo and Zimbabwe identify the best methods for effectively mobilizing the human and financial capital of the diaspora.
This follows the signing of a protocol agreement in Addis Ababa, Ethiopia, in December 2023.
The project will “support socioeconomic development by reviving the domestic private sector or recovery from political or humanitarian crises by leveraging the expertise and networks of Diaspora groups,” according to the IOM.
The fund will go towards supporting socioeconomic development by reviving the domestic private sector and recovering from political and humanitarian crises by leveraging the expertise and networks of diaspora groups.
“The African diaspora, with its vast resources, skills, and networks, holds an unparalleled capacity to drive economic growth, innovation, and resilience in our home countries,” said Lamin Drammeh, a manager at the African Development Bank financial intermediation and inclusion division.
“This multi-country intervention will contribute towards strengthening private sector development, which will foster economic growth as well as socioeconomic resilience in the beneficiary countries,” Drammeh said.
The initiative will also enhance “business development by leveraging diaspora-oriented financing opportunities and tools and entrepreneurship initiatives,” Drammeh added.
The African diaspora has been hailed by the continent’s governments for driving human development through annual multi-billion dollar remittances, but with little formalized investment.
The IOM’s partnership with the AU and the AfDB seeks to change that.
“Acknowledging the important role diasporas play in their countries of origin, several governments in Africa have developed policies that seek to harness the potential of their diaspora in national development through financial and social remittances,” said Mariama Cisse Mohamed, Director of the IOM Special Liaison Office in Addis Ababa.
“However, there are persistent challenges, including governments’ constraints on data collection among diaspora to facilitate meaningful engagement, limited dialogue between African governments and diaspora and the high transfer costs associated with remittance transfers,” Mohamed said.
With an ever-increasing number of African migrants making perilous journeys to developed countries seeking better economic opportunities, agencies are calling for the formalization of the continent’s development agenda with the Diaspora.
The multi-million-dollar SDE4R project is expected to address the needs of Africa’s most vulnerable populations, with the incentives also expected to stem the dangerous and usually illegal journeys African migrants continue making.
“It is further expected to contribute to reinforcing socioeconomic resilience of vulnerable populations, particularly women, youth, rural dwellers and forcibly displaced populations,” said Angela Naa Afoley, Head of Division of the African Union Commission’s Citizens and Diaspora Organization Directorate.
This will include assistance “through diaspora-related humanitarian, educational, health and other resilience-building support and the temporary return of skilled and qualified diaspora members,” Afoley said.
“By streamlining processes, reducing barriers, and providing strategic support, the SDE4R project will unlock new opportunities for investment, spur entrepreneurial ventures, and ultimately enhance the resilience of communities, nations and the continent,” Afoley added.
According to the IOM, the USD5 million project is expected to have 10,000 direct beneficiaries and 40,000 indirect beneficiaries in communities affected by conflict, climate change and other humanitarian and environmental disasters.
The IOM is implementing the project over three years with strategic oversight, guidance and advisory from the African Union Commission.
The initiative is part of the IOM’s Humanitarian Development and Peace (HDP) program, which focuses on the implementation of strategic frameworks and shared priorities among humanitarian agencies.
According to agencies, an estimated 160 million Africans are in the diaspora, remitting USD96 billion in 2021, more than double the USD35 billion recorded in official development assistance that flowed into Africa in the same year.
IPS UN Bureau Report
