By Jean Manirakiza
Recently, I attended a fundraising function by Indego Africa; a US based social enterprise that helps Rwandan women. Through Indego Africa, women sell their handicraft to the United States of America and they pocket 100% of the profits. While I enjoyed the event, I couldn’t help but notice the absence or lack of participation from fellow Africans. We speculated on excuses that could prevent them from showing up. In my interaction with many Africans here, I observe cynicism rooted in a pessimistic view of Africa. One could excuse non Africans for their willful ignorance but not native Africans. Paradoxically, the African Diaspora continues to be one of the most generous contributors to the development of Africa, despite their apparent apathy.
Cash cow: regular remittances
Earlier the same day, while making yet another money transfer to Burundi, I met a few Africans from Kenya, Ghana and Ethiopia. Funny that it’s not the African, but the Western Union that brought us together. We talked about the frequency with which we engage in these rituals – sending our hard-earned dollars to our less fortunate relatives on the continent. Some of us silently agonize about the effectiveness of sending money back to Africa; we feel like “feeding people instead of teaching them how to fish”. But what is the alternative the model? Can we find a more sustainable way of helping our relatives? Or do we keep reinforcing dependence despite Dr. Dambisa Moyo’s warning that foreign aid does not work? Indeed, it may be different from Official Development Aid (ODA) but it is foreign aid. But unlike foreign aid, we have almost no way of measuring the effectiveness of our remittances. All we know is that recipient individuals and governments benefit from our largesse.
30 Million African Migrants contribute up to $40 billion annually
About 30 million Africans live and work outside their home countries. The African Development Bank (AfDB), the World Bank and the Migration Policy Institute indicates that the African diaspora contributes enormously to the economic development of their countries. They send home some $40 billion dollars per year, close to the $50 billion the G-8 nations pledged to Africa a few years ago. Nigerians alone send home close to $10 billion a year, far more that Official Development Assistance (ODA). Egyptians send up to $7 billion annually and all African nations benefit from their far away children.
Basic consumption and low risk investment
Remittances are mostly used for basic needs: food, shelter, health care and small businesses. Cash-strapped families have no other choice but to use their remittances to cover immediate needs. Experts estimate that about 5 -10% of remittances are allocated to low risk investments. For example, an expat will underwrite a real estate project as an investment or just to improve housing infrastructure for his close relatives.
Employment and small business creation
Another portion is allocated to informal employment through small business startups. It may be a food stand at the local market, a phone kiosk or any other type of street hawking. Subsequently, through this informal job creation, African governments benefit indirectly through relief of pressure in the labor market. It’s most likely that self-employed citizens constitute less of a headache compared to disgruntled ever-growing ranks of unemployed for as a popular song goes: “… a hungry mob is an angry mob”. The recent Mozambican food riots are just one small example.
So, if African migrants are the proverbial golden goose, it would make sense for us to constitute a special interest, not only find more effective ways to leverage our economic power but also to advocate for a better governed Africa. We will need to overcome our cynical and pessimistic view of Africa. With hope for a better future, we may even become a source of foreign development investment. Why not? We have the power!
Source: Africa Good News