The diaspora exerts a mixed influence on African economies
But with better governance, deregulation and greater stability, the hundreds of millions of Africans working abroad could fuel a development boom of truly epic proportions. The African Diaspora is so vast and important that the African Union has officially declared it the “sixth region” of the continent after the East, West, North, Center and South. The clearest impact of Africans abroad comes in the form of the personal remittances they send to the continent, which dwarfs foreign direct investment. In 2019, Africa received $82.7 billion in personal remittances, nearly double the foreign direct investment (FDI) inflows of $46 billion. Remittances to Nigeria alone amounted to $23.8 billion, compared to $3 billion in FDI. Egypt has seen remittances worth $26 billion. These are only the formal and accounting payments. These payments provide a financial crutch to millions of households. This is why smaller, poorer and more fragile economies depend so much on it. According to World Bank statistics, the top recipients of remittances in Africa as a proportion of their economies are South Sudan, Lesotho and The Gambia, with 35%, 21% and 15% of GDP coming from remittances, respectively. of funds. Between 2004 and 2017, remittances as a percentage of GDP increased from 1% to 7.5% in Ghana. Across sub-Saharan Africa, where agriculture provides at least 50% of livelihoods, remittances supplement farm income. They diversify the sources of income for African households and enable beneficiaries to invest in health and education, thereby reducing their exposure to food insecurity and poverty. While remittances are mixed, other impacts on the diaspora are overwhelmingly positive. Those who can be drawn to Africa come back with world-class education and work experience. As ambassadors of Africa in developed countries, the diaspora has a role to play in combating climate change, deepening commercial ties, stimulating investment in the continent, promoting regional security and the promotion of democracy.
THE SOURCE: AFRICAN AFFAIRS