By Meghan McCormick |Forbes
Global remittances to Sub-Saharan Africa (SSA) grew by 10% to $46B in 2018 (the last year for which we have complete data from the World Bank). Remittances, or money sent as a gift typically from family members working in a high-income country to family members living in low- or middle-income countries, are an important part of the global economy. They account for more transfer of funds to SSA than aid from the top 10 donor countries and institutions. The money sent to Africa through remittances is actually larger than many African-country GDPs. Remittances would be the 12th most productive economy in SSA, just behind the Democratic Republic of the Congo and ahead of Côte d’Ivoire.
This money is important to families all across the continent for paying utility bills, school fees, and basic necessities, but many Africans, both at home and in the diaspora, are asking themselves how at least some of this money can be put to a more productive use through investment. One of the organizations at the forefront of this movement is the African Diaspora Network.
Almaz Negash left her native Eritrea in 1984 during the country’s war with Ethiopia. By 1987, she was living in the United States studying to get a bachelor’s degree in international business and ultimately an MBA. She got married, had children, and made a career and a life in the United States. In that way, she is a typical diasporan, but instead of just sending money “home”, she decided to do more.
“I was just a bit concerned about the fact that I live in Silicon Valley, I had access to many different opportunities but, wherever I went, I was the only African in the room,” she said. 10 years ago she founded the African Diaspora Network to bring more Africans and friends of Africa to the table. Based in Silicon Valley, the non-profit organization’s flagship event is the African Diaspora Investment Symposium.
Over the past 10 years, Negash has seen the stance of Silicon Valley change towards Africa. The dialogue is changing from being about how to help Africa to how to invest in Africa. This shift is partially driven by demographic changes. Over the next 30 years, it’s estimated that the population of SSA will double. With 1B more Africans, Africa will overtake central and south Asia as the world’s most populous region. Companies seeking growth need to start investing in these markets today.
“Africa is a huge market. So, if you happen to be Cisco, you want people to have computers. And then if you have computers, you need routers and so these are the kind of chain reaction to why companies want to invest,” said Negash.
SAP, VMware, Facebook, Ebay, Johnson & Johnson, and EY were all sponsors of this year’s Investment Symposium demonstrating that they are at least ready to invest in learning more. Some companies have gone a bit further. According to Negash, VMwear hosted a delegation from Ethiopia last year and Google famously opened an AI lab in Ghana in 2019.
While it seems like corporations are ready to invest in serving the African market, governments have a role to play to make the investment happen. While progress on the policy front has been uneven, Negash sees that countries like Ghana, Kenya, Ethiopia, South Africa, and Nigeria are taking the right step to capture the opportunity.
The first step though, is getting in the room (or virtual room) together. “I think we’ve proved the concept that Africans and friends of Africa can work together, they can collaborate, they can co-create, they can co-imagine, they can sit at the table really get to know each other, and do some amazing things together,” said Negash.
Whether it’s by opening up tech companies to the opportunities in the African market or by shifting a portion of remittances to investment, the diaspora has a critical role to play in unlocking economic growth across Africa. What makes this proposition powerful is that the growth will not just accrue to the continent, but to the world. Negash said, “The more we bring technology companies up to the table and the more we really showcase who the diaspora is, the better it is for their operations and, I believe, the better it is for the continent.” For any investment to reach scale, it has to be win-win. The work of the African Diaspora Network and other similar organizations is demonstrating how it can be value-generating for all.
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