How Africa could benefit from its diaspora remittances.

When Microsoft board appointed CEO Satya Nadella to take over at the helm from the long time CEO Steve Ballmer, The Indian media was splash with several headlines. They all pointed to the increased number of powerful positions that the Indian born immigrants were playing in The United States. In August 2011, Time Magazine splashed the cover story ‘India’s Leading Export: CEOs.’ It is estimated that a third of Microsoft employees are of Indian descent. While many immigrants from Africa have not risen to the powerful positions as the Indian immigrants, they too have occupied important positions in Wall Street, leading universities, and even in Silicon Valley itself. There clout has grown so much that The African Union has recognized them as a special pillar of development in the continent. The AU secretariat has created a special institute, to be headquartered in Nairobi, Kenya, to specifically research on the Africa diaspora remittances. 

Many immigrants from Africa hold at least a college degree, and are engaged in all sorts of economic activities. In a recent book written by Amy Chua and her husband Jed Rubenfeld, ‘The Triple

package: What Really Determines Success; the authors identify Nigerian Americans as one of the most successful ethnic groups in the United States. The largest number of immigrants to The West are drawn from Nigeria, Ghana, Ethiopia, Somalia, and Kenya.

For now, most immigrants churn their money through relatives, and entrust them to carry out projects on their behalf. However, there have been horror stories from such arrangements. Stories abound of relatives who sent pictures of houses being constructed, even as they continued to receive money from their diaspora kin, when in actual fact, there was no construction taking place. The diaspora would arrive home years later to find that no house had been constructed. The remittances from the diaspora have best gone into consumption, rather than in productive endeavors. Banks in the continent could come up with innovative products to specifically target this critical group.

Another critical avenue that countries have tapped into is granting of dual citizenship to their kith and kin abroad. Nigeria, Ghana, and Kenya are just some of the countries that grant dual citizenship to their citizens abroad. Still, African countries have been urged to be more innovative in their approach to remittances. Economists argue that diaspora bonds should have been floated yesterday. Still, remittances are a powerful form of investment for one important reason. The diaspora, despite staying abroad for many years, still have an emotional attachment to their home countries. Despite negative news that they might get from the international media about Africa, they are willing to invest in important sectors, if they are actively involved by their home governments. In a way, they could be the source of the magical Foreign Direct Investment- FDI, which many African countries so badly crave for.