There are estimated 286 million people living in a country other than their countries of birth in 2022[1]. This number is over three times the equivalent estimate in 1970 – when decolonisation of Africa was nearing its end, and saw a wave of migration from former colonies to the hearts of the colonial empires – including the UK, France and the Netherlands. Over this period of time, and some decades prior to this, first-generation migrants and the contemporary African diaspora have grown in their numbers, including those of the second, third and beyond generations, adding to the 286 million migrants.
While politicians and development actors often see this as a problem “to be solved,” with popular (and negative) narratives that have seen a surge in far-right movements in Europe, migrants and diaspora continue to present an under-tapped resource for sustainable global development. And it is not just these first-generation migrants, but also their children who maintain some links to their parents’ home countries – all of these collectively defined as the diaspora.
AFFORD was established in 1994, with a mission “to expand and enhance the contributions Africans the diaspora make to African development”, and is celebrating the culmination of its 30th anniversary this year. High on its agenda will be continuing to pioneer efforts on diaspora remittances, diaspora finance and diaspora direct investment (DDI) for sustainable development. Through engagement with the diaspora, AFFORD will continue its focus on decent job creation and upskilling of young people for increased employability, and, its work on restitution with a particular focus on its potential to drive socio-economic development in countries of origin.
Since 2020, AFFORD has been working with The Social Investment Consultancy (TSIC), also a Global Majority-led organisation, on multiple initiatives. TSIC has been working actively in the field of impact investments – investments that aim to achieve not only financial returns, but also social and environmental returns. Last year, the impact investing market has reached $1 trillion, a significant milestone for a relatively nascent sector. Both organisations believe in the opportunity of bringing the currently disparate worlds of diaspora finance, including Diaspora Direct Investment (DDI) and impact investing more closely together.
In AFFORD’s 2019 policy brief about the potential of blended finance, as part of the largest diaspora finance programmes to date – Comic Relief/UKAid funded Common Ground Initiative (CGI) – it was mentioned that while there have been multiple successful diaspora finance initiatives, they tend to be driven by governments and geared towards infrastructure projects. In AFFORD’s engagement with African diaspora, they tend to invest in projects where they can more easily see where their money goes, and where they can be a part of the process through other forms of contributions, such as mentoring. They are motivated not only by financial returns, but also social and environmental returns, and perhaps in equal measures too. However, most diaspora investors are not aware of the impact investment opportunities available; neither has there been a demonstrable or exemplary match-making between the diaspora sector and the impact investment space.
The market of diaspora investors can be significant. In 2023, global migrant and diaspora remittances are projected to reach $669[2] billion to LMICs – more than three times the amount of development aid for more than a decade and exceeding foreign direct investment by $250 billion. In 2022, remittances to North and Sub-Saharan Africa exceeded $100 billion for the first time, more than $45 billion deployed in FDI in the same year.
Alongside remittances, and according to a recent research carried out under the AU’s Legacy project[3], the volume of African migrant savings is USD33.7 billion (ie USD1980 average savings per 17 million African migrants living outside the continent). This does not include the millions of multi-generational African diaspora, including the historic African diaspora who have long since engaged the continent on a range of significant issues, not least those of restitution and reparation.
If each of the 281 million migrants invests an average $50 a year – either as part of their remittances or in addition – a conservative total of $14 billion can already be mobilised globally, bearing in mind that this does not include multi-generational diaspora.
In 2024, AFFORD and TSIC will be co-designing some impact investment facilities, leveraging diaspora finance for achieving the sustainable development goals in Africa. If you are interested to learn more and keep in touch, please e-mail [email protected].
__________________________________________
[3] Faal, Gibril. Strategic, Business and Operational Framework for an African Diaspora Finance Corporation: African Union Legacy Project on Diaspora Investment, Innovative Finance and Social Enterprise in Africa. GK Partners, 2019.