The role of Diaspora in the growth and development of Africa.
From Dakar to Hargeisa, Benghazi to Cape Town, there is one thing in common in every household in these cities- at least there is one person residing in the diaspora. How they left their home countries to the western countries, Middle East and Asian sub-continents varies. Some people left for studies overseas, others went has refugees, some went through work agencies like in the gulf countries and others risked it all through the Mediterranean to Europe.
Regardless of how they travel to these places or the challenges they face in these foreign countries, most of the immigrants have become a strong backbone to the home economies through remittances. Somalis alone send over $1 billion annual back home. In the IOM report, it states how crucial is this money sent back home from different countries to Somalia. The biggest number of the population survive with the help from relatives living in the diaspora. Last year, remittance inflows to Sub-Saharan African countries rose by 14.1 percent to $49 billion, according to The World Bank. In 2023, remittance outlook is looking moderately positive, according to The World Bank's recently released Migration and Development Brief. With these findings and recording, the ‘Hawala’ transfers are not registered. The sums can be more than $49 billion.
When you are walking in downtown Kampala or Nairobi or on a random street in Lagos, you will see numerous money transfer agents, and new ones are still coming up. From Send wave to Dahabshiil, JubaExpress, Western Union, Money Gram, InterSwitch. From this wide range of choices, customers decide to use the agents who offer them the best transfer fees and better services
The governments also tend to benefit from these transfers through taxes. Taxes are the first opinion of African governments over the remittance transfers. The source of the funds or the usage of these funds are not really investigated thoroughly neither does the central banks endeavor to check the sources of these inflows of money to the economy.
Migrant remittances represent the most direct, immediate and far reaching benefit to migrants and their countries of origin. They are a more constant source of income to developing countries than official development assistance, foreign direct investment and other private flows. Moreover, the emergence of remittances as a new strategy for poverty alleviation in developing countries has spurred multilateral institutions, international organizations, and national governments, among others, to seriously study, identify and implement measures on how these inflows could be maximized and then harnessed for the development of migrants’ countries of origin.
As the IFAD research stated, ‘Migrant workers send on average US$200–US$300 home every one to two months. This represents only 15 per cent of what they earn (the rest stays in their host countries). But what they send can make up as much as 60 per cent of a household’s total income –representing a lifeline for millions of families.’
For instance, the Ethio-Eritrean communities in Uganda, depend entirely on remittances from overseas. These funds cater for their accommodations, facilitate their health services, school and other utilities. It is the same as the Congolese refugee communities and Sudanese in Kampala. These funds not only act has a livelihood but also a source of security in lands away from their war-affected countries.
The efforts of Africans in the diaspora are greatly changing the narratives of their home countries through these aids. Remittance flows can reach the last mile even during tough times. This is made possible by, among other factors, the adoption of digital technologies by migrant workers and their families. In particular, the amount of money sent via mobile transfer – i.e., a service that allows users to send and receive small sums via mobile phone without the use of a bank account – for example during the 2019-Covid pandemic where the countries’ economies were completely shut, these remittance inflows continued through mobile exchanges undisturbed.
Investing Back Home.
“Between 2022 and 2030, an estimated US$5.4 trillion will be sent by migrant workers back to their communities of origin in developing countries. Of that amount, around US$1.5 trillion will be either saved or invested.” -IFAD
Migration policies need to consider how immigration affects investment behavior and productivity, and how these effects vary with the type of migration. College-educated immigrants may do more to stimulate foreign direct investment and research and development than low-skilled immigrants, and productivity effects would be expected to be highest for immigrants in scientific and engineering fields. Though the informal sector too in crucial in the economic growth of home countries.
Experts and highly educated immigrants affect economic growth back home through investment in education and technology. And forming of platforms that facilitate education of high achievers in the academic sector. The importance of such efforts can be seen long term, but they are influential in the development of the continent.
Other forms of investments can be seen through tangible resources like containers of used materials sent from host countries to their countries of origin. Agricultural growth through investments in modern technologies, this has played a part in fighting famine in rural areas.
How will the continuous inflow of remittances affect the continent as a whole- since this system of assistance seems not to stop but to increase. Quite many Africans wish to migrate overseas for greener pastures and continue the chain of helping home communities. Just like Jason DeParle’s book (A Good Provider Is One Who Leaves) shows a transition of a Philippine family through working abroad and the impact it had on their culture and development. Where does this leave the politics, social lives and the ethnicity at large of the continent in the coming decades.
