Diaspora remittances to the continent should be acknowledged, respected, and further investigated, says Dr. Akinwumi Adesina, President of the African Development Bank (AfDB) Group, as Nigeria and other African nations continue to look for alternative sources of income to address developmental challenges.
The value of remittances from the African diaspora increased from $37 billion in 2010 to $87 billion in 2019 and will reach $95.6 billion in 2021, according to Adesina’s assessment.
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“Yet, official development support to Africa in 2021 was $35 billion or 36 percent of the remittances from the diaspora,” the AfDB President continued.
He claims that with $31.5 billion and $19.2 billion in remittances received in 2021, respectively, Egypt and Nigeria rank among the top 10 beneficiaries of remittances worldwide.
At a recent conference on “Development Without Borders, Leveraging the African Diaspora for Inclusive Growth and Sustainable Development in Africa,” which was organized by the bank in partnership with the African Union Commission, the International Organization for Migration, and the African Continental Free Trade Area Secretariat, he made this statement.
Adesina asserts that the African diaspora has grown to be the major funder of the continent in a statement made available to The Guardian yesterday in Abuja, adding, “and it is not debt, it is 100 per cent gifts or grants, a new form of concessional financing that is the key for livelihood and security of millions of Africans.”
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, he noted that there is still much that can be done to better tap into these remittances for the continent’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.”
He argued that securitizing remittances would encourage investments, particularly in infrastructure on the continent, and that the diaspora could provide much more than just remittances and capital.
“This 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’’.
