The power of African Diaspora Capital

It has been reported that approximately $60 billion is what the African Diaspora provided in financial support to the continent of Africa. This figure is actually way more significant than the total amount of aid money Africa receives from donor countries. It is time both the African Diaspora and African governments begun to realise the collective economic power the African Diaspora hold as a group. The next thing to ask is how his money has been used to support Africa. Unfortunately, most of that financial support goes in the form of remittances to family members on the continent. Whist it is a good thing that those in the Diaspora are willing to provide support to family members and close relatives, the problem is that this type of financial support does nothing to facilitate the development of Africa. Another major way the African Diaspora provides financial support to the continent is through tourism. Tourism is increasingly becoming more important to the economies of African countries because it not only supports their local businesses but it provides access to much needed foreign exchange. On the surface, it may seem that this $60 billion is having a significant impact in the development of Africa but the truth is that most of the money will not stay in African economies for very long because of the import dependency of most African nations. Only a small percentage will circulate in their economies whilst the majority of that financial support will end up going towards the purchase of imported goods and services. The only way the capital of the African Diaspora can play a significant role in the development of Africa is if that money was channeled to more productive areas. Diaspora capital can be used to channel resources towards the formation of creating new business enterprises and financing existing enterprises in strategic sectors that will significantly increase the export potential of African economies. It could also help facilitate the reduction in import dependency by supporting import substitution industries. Currently, diaspora capital is not being strategically employed which means that the potential for diaspora capital to be used as a force for long term sustainable economic development in Africa has yet to be fully realised. What is more shocking is that African governments have not yet made any real attempt to mobilise the power of the African Diaspora’s capital towards such endeavours. It would appear that they are still orientated towards growing more dependent on institutions like the IMF and World Bank even though such institutions continue to prescribe African governments to adapt policies that have negatively impacted their ability to develop. Africa must recognised the power of diaspora capital and the African Diaspora must also recognise what an important role they can play in the development of Africa. There is a great need for organisations to be created that can bridge the gap between the diaspora and Africa. Such organisations must provide the appropriate mechanisms that will allow diaspora capital to be efficiently allocated to support further development. The diaspora must also be willing to engage with Africa beyond remittance and tourism and start to view themselves as a collective economic unit that can be a positive force for development in Africa.