Rwanda is another country that has succeeded in requesting help from its citizens living abroad. In 2012 the government asked its diaspora to help free Rwanda from its dependence on foreign aid and finance its development strategy. It set up the Agaciro Fund and has raised over $30m, according to the fund’s website.
Regular dialogue is crucial to successful diaspora contributions, says Gaetan Gatete, head of the US-based Rwandan Diaspora Network. The group holds an annual Rwanda Day meeting with President Paul Kagame and members of his cabinet, Gatete said. “This makes a difference because he is seen to be taking us seriously and the diaspora believe they have a voice,” he added. Kagame has attended four such events since 2008 in Canada, the UK and the US, according to Rwanda’s embassy in Washington, DC.
Africans living abroad want to get involved
At least 32 African nations, in need of revenue, investment and human capital, have created organisations to tap their diaspora’s funds and know-how. Sierra Leone, South Africa and Ghana, for example, have organised high-profile homecoming summits to attract diaspora attention and investment.
But many of these groups are poorly funded and understaffed, according to Gerd Junne, a former University of Amsterdam professor who set up Remittances for Community Development, a website which shares research. This has frustrated many Africans abroad who are eager to contribute skills or dollars.
Most Africans living abroad would like to participate in their country’s politics, according to analysts, but some African governments may consider them a political threat. Only 21 of Africa’s 54 countries allow their citizens to hold dual nationality, according to an International Monetary Fund (IMF) report. And just four countries – Kenya, Nigeria, Rwanda and South Africa – have granted voting rights to citizens living overseas, according to the World Bank.
Of these, few overseas voters are able to vote in reality, according to the bank. In South Africa’s 2009 elections only 16,000 of an estimated 1.2m South Africans living abroad were able to register to vote. The government claimed it did not have the resources to register all its expatriates.
Africans in the diaspora save almost as much as they send home – up to $50bn a year, according to the African Development Bank, which notes that much of this is invested outside of the continent. Sonia Plaza, a World Bank senior economist, believes the diaspora could make an even more significant impact. “If one in every 10 members of the diaspora could be persuaded to invest $1,000 in his or her country of origin, Africa could raise $3bn a year for development financing,” Plaza wrote in a September 2011 IMF report.
Diaspora bonds have worked well for India and Israel. Both countries have raised $35bn-$40bn since they first issued the bonds (Israel in 1951 and India in 1991), according to the World Bank.
A few African governments have tried floating diaspora bonds to fund large infrastructure projects – notably Kenya and Ethiopia, according to Plaza. But lack of confidence is a hindrance. “A lot has to do with, in some instances, trust in the government’s ability to deliver in terms of infrastructure projects,” says Dele Meiji Fatunla, a Nigerian-British writer working at the UK’s Royal African Society. He has yet to be convinced to invest in diaspora bonds. “There has to be a lot more focused marketing and encouragement of diaspora investment,” he says.
The problem is that few governments understand the motivations behind diaspora engagement, says Chukwu-Emeka Chikezie, who co-founded the Africa Foundation for Development, a UK-based diaspora group. “It is a maxim of good marketing that you must know and understand your customers in order to win their business and serve them,” Chikezie adds.
Governments are more likely to succeed if they incorporate their expatriates into poverty reduction plans, he says. Economic reforms are also crucial to getting the diaspora involved. “Despite the emotional connection, [people in the] diaspora are making decisions based on rational calculations, so if your economy is dysfunctional and not offering returns, the likelihood the diaspora will be part of any growth story is slim,” Chikezie says.
Expatriates may be more willing to take a risk. “A foreign investor will look at a project and see what is the quickest and cheapest way to get this thing built,” Riddle says. “A diaspora [investor] is willing to forgo profits initially and invest in the people locally.” Diaspora investors want more than the bottom line, she adds. They want to see their homeland developed.
This article was first published by Good Governance Africa.