Fostering Growth in Africa: The Role of the African Diaspora
Welcome to the Whittier Law Group African Trade Blog. This blog will focus on discussions related to opportunities for trade between Africa and its diaspora descendants. We will routinely cover aspects of world trade that are universal (customs & excise laws, shipping, trade finance, etc.) however, these topics will primarily be covered in the context of how they influence trade between Africa and the world.
Our first blog asks, “How can the African diaspora help the continent increase its productivity and wealth for its citizens?”
Fostering Growth in Africa: The Role of the African Diaspora
Africa, often dubbed as the world’s final frontier in economic development, is a continent (consisting of 54 separate countries) with immense potential. With its youthful population, abundant natural resources, and a growing pool of entrepreneurs, the continent’s prospects for growth are undeniable. However, the realization of this potential requires substantial input in terms of resources, expertise, and investment. Here is where the African diaspora (an estimated 140 million Africans living overseas and 120 million people descended from Native Africans living throughout the world) and their potential contribution to Africa’s development is significant.
Remittances: A Financial Lifeline
The first and most direct way the African diaspora can contribute to the continent’s economic wellbeing is through remittances. According to the World Bank, remittances to Africa totaled over $48 billion in 2019. This money provides a critical lifeline to families, boosting household income, and allowing for increased spending on health, education, and small business creation, all vital components of sustainable growth. There is potential for policy interventions to leverage these remittances more effectively, enhancing their impact on development.
Bridging the Investment Gap
Beyond remittances, the diaspora can play a crucial role in bridging the investment gap. Many African economies lack access to the capital necessary for growth, and traditional foreign direct investment (FDI) has often been insufficient and concentrated in natural resource extraction. The African diaspora, with its understanding of local conditions and a vested interest in the continent’s success, is well-placed to provide both the funding and the confidence that can attract further investment.
Capacity Building and Knowledge Transfer
Thirdly, the diaspora is a rich source of skills and expertise that can help to address some of the critical capacity constraints facing African economies. African professionals abroad can contribute to capacity building through knowledge and technology transfers, either by returning to their home countries or through remote initiatives. They can also play a significant role in the education and training of Africa’s future workforce, enhancing productivity and competitiveness.
Cultural Exchange and Networking
Lastly, the diaspora is an essential cultural bridge, creating connections and networks that can facilitate trade, innovation, and mutual understanding. Diaspora communities can promote African products and services in foreign markets, facilitate business partnerships, and advocate for favorable policy environments.
Conclusion: Diaspora for Development
The African diaspora is already making a significant contribution to Africa’s development, but there is potential for even more. It requires creating an enabling environment that can harness the full power of the diaspora. This includes developing policies that incentivize and facilitate diaspora investment, ensuring the ease of remittance transfers, promoting diaspora skills transfer, and leveraging diaspora networks for trade and partnership opportunities.
It is essential that governments, international organizations, and private sector entities all work together to harness this potent force. With the right engagement, the African diaspora can indeed play an instrumental role in boosting Africa’s productivity and wealth, thereby driving the continent towards a more prosperous and sustainable future.
What do you think? Are there any avenues for the African diaspora to contribute to development on the continent that we missed? Do you have any further comments on the methods for diaspora involvement in African development mentioned above? Please feel free to respond and expand the discussion!