The President, African Development Bank Group (AfDB), Akinwumi Adesina, has described Africans in the diaspora as critical to the continent’s economic development as they constitute the continent’s largest financiers through remittances, which has now reached $95.6bn.
Mr. Adesina made the disclosure yesterday at an event ‘Development Without Borders: Leveraging the African Diaspora for Inclusive Growth and Sustainable Development in Africa’, organised by the bank, in collaboration with the African Union Commission, the International Organisation for Migration and the African Continental Free Trade Area Secretariat.
The AfDB president was quoted in a statement by the bank issued yesterday saying “The value of remittances from the African diaspora doubled from $37 billion in 2010 to $87 billion in 2019, reaching $95.6 billion by 2021.
Yet official development assistance to Africa in 2021 was $35 billion, or 36% of the remittances from the diaspora. Egypt and Nigeria are among the top 10 remittance recipients globally, with $31.5 billion and $19.2 billion respectively in 2021.”
Adesina also stressed that Africans in the diaspora had become the largest financiers of Africa, with the funds from them not being debts.
He further noted that while remittances had helped to meet financial, food, education, and health needs, as well as serve as countercyclical sources of finance and social protection, more can be done to tap into these remittances for Africa’s development.
“We must eliminate the Africa-premium charged on remittances, as the cost of remitting funds to Africa is twice what it is for South Asia. We must tap the massive opportunities offered by diaspora bonds,” he added.
The president described diaspora bonds as an effective instrument to harness remittances for the development of Africa. But despite its great potential, he added, only four African countries (Ethiopia, Kenya, Ghana, and Nigeria) had successfully issued diaspora bonds, often with mixed results.
According to Adesina, the flow of remittances to Africa was high, rising, and stable, while offering huge opportunities to serve as collateral to secure financing for African economies.
He urged African countries to securitise remittances to promote investments, especially for infrastructure on the continent, stressing that the diaspora can offer a lot more than remittances and investments.