Africa’s best investor and donor is its diaspora with an approx $50B annual remittance, not western aid and debt traps

Various African governments must have a second look at the issue of financial support and the influx of donor organizations to the continent; many of which comes with regrettable terms and conditions that are detrimental to the development and sovereignty of the continent.

Remittances to Africa has over the years proven to be a major contributor to the economic growth of the continent with no stringent attached. Many Africans who, through the effects of brain drain and other factors left the continent to live and work abroad have for some time contributed greatly to the development of the continent through their steady money transfers to their various countries of origin.

A report by the international Monitory Funds (IMF) admitted that, “for many economies, remittances represent a sizable and stable source of funds that sometimes exceed official aid or financial inflows from foreign direct investment”. The report further added that, “remittances may have a significant impact on poverty reduction and can finance economic growth in the receiving economies”.

The World Bank reported earlier that, remittances to sub-Saharan Africa alone in the year 2018 was pegged to $46 billion. A follow-up report from the Bank on the year 2019 had it that, “Nigeria, which has a sizable diaspora across the world, is by far the largest recipient of remittance flows with $23.8 billion in 2019 followed by Ghana ($3.5 billion) and Kenya ($2.8 billion). In South Sudan, remittances of $1.3 billion accounted for 34% of its GDP, the highest in the region.”

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The fact however is that, the official figures do not represent the true numbers behind the cash and kind transfers to Africa by its sons and daughters resident in the diaspora. The informal and unidentified channels equally contributes a great deal.  In view of this, the quoted annual figure of $46 billion for 2018 can be approximated to $50 billion and above. Same applies to the various years.

In brief, Africa receives a lot from the diaspora which in some cases are way bigger sums than some of the parasitic conditional aids given by these international organizations. If that is the reality on the ground, why are African leaders still trading the sovereignties of their respective nations all in the name of financial aid?

The continent need to adopt measures to change the aid, or financial support narrative from the over dependence on killer loans and have a paradigm shift to the remittance effect and how that can be explored to support development activities on the continent.

Looking at the volume of debt owed by African countries, there is an urgent need to re-strategize and turn our adversity, which is the mass exodus of highly skilled and vibrant youth from the continent to developed countries into something meaningful whilst we work on resolving the problem of migration once and for all.

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