Bridging the divide: Africa’s diaspora willing to invest back home

When El Hadji Sall left Senegal as a young man to study electrical engineering at Howard University in Washington, DC, he planned to return home upon graduation. Thirty years later Sall is still in the US and now bridges two worlds as an African and an American. Holding dual nationality, he is a religious leader, an engineer and an active figure in encouraging members of Senegal’s large diaspora to invest in their homeland.

“The money is here. People like me, there are thousands of them,” Sall says of the shared desire among his fellow expatriate countrymen to spur progress in their mother country. “If we could sit down and talk seriously about getting the diaspora involved then I believe that Senegal could become a developed country very soon,” he added.

Sall is one star in a wide constellation of Africans scattered abroad who have kept strong ties to their native lands. It is difficult to pin down the number of Africans living abroad, partly because the definitions of the continent’s diaspora vary. The World Bank estimates that Africa’s “foreign-born population” in 2010 was just over 30m, but this only counts first-generation migrants, thus excluding “children and grandchildren who may have ties to the origin country”. The African Union (AU), however, has a much broader definition: it defines the diaspora as “peoples of African origin living outside the continent, irrespective of their citizenship and nationality”. Using the AU’s definition, the bank estimates that more than 168m Africans are living in the Americas and Europe.

Under either definition, in 2010 expatriate Africans sent home huge sums: US$51.9bn to help family and friends with the daily cost of living, according to the World Bank. In 2012 the figure reached $60bn, while the estimate for 2013 is $62.9bn.

Remittances are not the only way of contributing to development back home. A lot of Ethiopian-Americans live in the US but keep ties to their country through their relatives who still live there, says Melaku Nagussie, an Ethiopian-American engineer. “And they have a need to go back to help their country in some fashion.”

Ethiopia’s ties with émigrés

Nagussie’s Ethiopia is one country that has succeeded in maintaining ties with émigrés through specific policies and dialogue. The East African government established its Diaspora Directorate in 2002 and now has an online portal where Ethiopian expatriates can find information about investing, tax and customs procedures. They can also apply for the “yellow card”, which entitles foreign-born Ethiopians to enter the country without a visa, work without a permit and own residential property.

In addition, several Ethiopian ministries house diaspora affairs units. For example, the health ministry partnered with exiled physicians in March 2009 to set up the country’s first emergency room training school, which has trained 4,000 first responders, basic trauma providers and technicians. The 170 members of the Ethio-American Doctors Group are working with the government to build, train and staff the country’s first internationally-accredited tertiary hospital with services that will include surgery and psychiatry. Construction of the 300-bed hospital is scheduled to start in June and should be completed by the end of 2016.

Open dialogue and a common purpose are behind the training school and future hospital, says Dr Addis Tamire Woldemariam, who works at the health ministry’s diaspora unit. “That’s the secret behind every success with engaging the diaspora.”

Ethiopia is unique in that its well-educated diaspora shares its skills, access to capital and experience with innovations to create strong networks that are “transforming Ethiopia”, says Liesl Riddle, a professor at George Washington University in Washington, DC, who has studied diaspora investment for 20 years.

One example is Eleni Gabre-Madhin, an American-educated Ethiopian economist who returned home in 2005 and set up the country’s first commodities exchange in 2008. The Ethiopia Commodity Exchange (ECX) now boasts more than 350 members trading coffee, sesame, maize and pea beans. The exchange settled $20m daily in 2010, according to the ECX website.

Another is Daniel Gad, a former vice-president of AT&T, who set up MetroLux Flowers in 2003, an ambitious venture that boosted Ethiopia’s fledgling cut-flower industry into the world’s fourth-largest exporter. Gad is now working with PepsiCo on a project to commercialise smallholder production of chickpeas.

“What is most significant about Ethiopia is the handful of spectacular individuals who are not working in [the] same sector competing head to head with one another. The diaspora complement one another, so they become friends and they create a network,” Riddle says.