Connecting the dots: engaging the African diaspora in trade, investment, and skills transfer for Africa’s development


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Nairobi is an African city that has benefited from diaspora investment. Photo - Clara Sanchiz/Flickr Creative Commons license.

With over 30 million Africans living outside of their home countries, the continent’s diaspora has the potential to be a major source of development financing. The financial power of the diaspora shows in the high remittance figures that Africa receives annually from its foreign-based communities. In 2010, estimates reached a record US$ 40 billion, or 2.6% of the continent’s GDP, not counting informal money transfers. Further, the diaspora saves an estimated US$ 53 billion annually.

These statistics, coupled with the fact that around one-third of the diaspora population are in the middle class, make it a formidable force for potential development partnerships. To engage with members of the diaspora and host a conversation about trade and education, the World Bank Group and the African Development Bank have organized the first annual African Diaspora Trade, Investment and Skills Forum on June 10, 2015. Those unable to attend can watch some of the sessions live here.

At this forum, participants will discuss and brainstorm around the potential benefits that Africa can reap from its diaspora population. Foreign-based Africans are often eager to invest and trade in their countries of origin. The benefits from such investments are numerous for both the potential investors and recipient countries. African investors are likely to be more socially conscious investors than their foreign counterparts due to social, cultural, and/or religious connections to their homelands. Their in-depth understanding of local contexts can lead to well-informed business choices and thus translate into more sustainable investments.

And this engagement is vital to the continent. The need for sustainable investments has never been more pressing, as youth unemployment numbers of over 50% and job-creation remain urgent issues across the continent. The ability of diaspora populations with much-needed capital to create jobs can contribute to local employment. In addition, the affinity that diaspora populations feel for their countries of origin creates a balance between purely profit-driven business motives and social investing, allowing for greater local value-addition.

Additionally, skilled diaspora populations have significant technical expertise. The continent’s brain-drain problems are a widely-known hurdle to development; it is also known that significant numbers of Africans abroad are highly skilled in areas that the continent severely lacks. There are perennial shortages of skills such as those in the math, science, technology, and engineering fields. African diaspora populations have shown significant interest in capacity-building and skills transfer partnerships with their home countries.

In spite of the diaspora’s eagerness to contribute to their countries of origin, significant barriers exist that threaten the realization of these interests.  If African countries are to overcome these hurdles and benefit from the large potential that their diaspora populations offer, there is need for a deliberate and coordinated diaspora engagement effort. The World Bank Group and African Development Bank hope to use the diaspora forum and a related survey as a launchpad to kick-start meaningful debate and knowledge sharing that will provide a solid and informed foundation for these efforts to occur.


John Speakman

Adviser, Trade and Competitiveness

Aklilu tesfai
June 10, 2015

1. How we can engage on power? On solar & wind ther are high tech company, but commercial loan can't compare with soft loan. Like GE is not ready for joint product. 2. There are demand on railway, but the price in USA. Is expensive than Asia. 3. On agriculture if you connect us with USA investors we can do effective facilitation work. 4. Real estate, Medicen, cloths, can invest in group like china and Turkey.

Andrew Paito Mutegi
June 10, 2015

Dear Sir,I realise this forum takes place today, unfortunately I will not be able to attend in person. However I would like to thank the world Bank for identifying such a niche for enhancing the economic growth of Various African families living in poverty as well as those struggling to stay away from poverty.
Remittances to Africa and other parts of the world has already been going on to the extent that it has picked the World Banks interest. I would like to quickly point out the role of legal frameworks that impede economic development of various families. Indeed Africans working in the diaspora use their labour as the source of their income (correctly earned income) yet when they have to transfer such money's within formal mechanisms, they are excluded by such legal institutions as the anti money Laundering laws championed by the world bank. The options many Africans are left with is using informal methods of money remittances. Such legal institutions and frameworks need to be revisited if indeed we are serious about tapping the opportunity from foreign remittances from the diaspora towards Africa's economic growth.(See De Soto 1989 for how the law has been used against the informal economy).
Secondly, the potential for Africans in the diaspora to maximise their earnings through legal ways should be enhanced.Many Africans in the Diaspora have indeed invested in real estates within the UK but are not allowed to rent out this houses till after 5 years when they can be allowed to. This limits their ability to Play this important role in building Africa. If they have been allocated these houses to purchase, why not allow them look for tenants so as to maximise returns from these assets, let alone speeding up the clearances of housing mortgages. This will in turn increase their productivity and enhance their investments in Africa. (See Perry et Al 2007 on how investments provide social protection that enhances productivity).
Andrew Mutegi Paito.
Masters of science in Development Management
The London School of Economics and Political Science.