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Diaspora remittances better than aid

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A man counts US dollar bank notes. Between 1960 and 2003 total foreign aid to Africa was only $600 billion but remittances from Diaspora Africans during that period were double the foreign aid amount. PHOTO | FILE 

By Adams Bodomo

Posted  Tuesday, March 4   2014 at  13:18

In Summary

Indeed the AU frames the definition of who is a Diaspora African very much in terms of contributions from them towards African development:

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The African Diaspora has grown to become such an important source of foreign exchange for Africa to the extent that the African Union (AU) has designated it as a sixth development “zone”, the other zones being West Africa, East Africa, Central Africa, Southern Africa, and North Africa.

Indeed the AU frames the definition of who is a Diaspora African very much in terms of contributions from them towards African development:

“The African Diaspora consists of peoples of African origin living outside the continent, irrespective of their citizenship and nationality and who are willing to contribute to the development of the continent and the building of the African Union.”

This article addresses important questions such as: what exactly is the volume of this important source of income to Africa, how do we compare remittances from Africans in the Diaspora to development aid from non-Africans, and what steps can African governments take to sustain and enhance this most reliable African development agency that is the African Diaspora.

Some of these issues are analysed based on empirical research on Africa’s newest Diaspora: Africans in China. We conclude with the idea that Diaspora African contributions are better than foreign aid funds from mostly western donors who may exert negative external influences on Africa’s sovereignty and future development.

To answer the first two questions, what is the volume of this remittance and how does it compare to the volume of development aid from non-African donors, let us sift systematically through some statistics over a number of years. No one really knows the exact amount of remittances Africans send back home, particularly since not all of this goes through official banking and remittance channels.

But the figure is believed to have gradually increased over the years. Historical figures from the IMF indicate that remittances have increased gradually from US$15 billion from 1998 to about US$20 billion in 2003.

Solome Lemma in her blog article indicates that Africans send home 40 billion each year, which is far more than the 7.7 billion that the US sent to Africa as development aid in 2010. Indeed Lemma confirms that between 1960 and 2003 total foreign aid to Africa was only 600 billion dollars but remittances from Diaspora Africans during that period were double the foreign aid amounts.

Already in 2007 according to Lemma, remittance to Africa by Diaspora Africans was 200 billion US dollars, which is far more than foreign aid to Africa in that year by non-Africans.

 The latest figures about Diaspora African remittance show that in 2012, despite paying far more remittance fees than most other areas in the world, Africans still sent back home to Africa a whopping 60 billion dollars.

What all this demonstrates is that the more than 30 million Africans outside are remitting far more money to Africa than the development aid funds that are accorded the continent from international donors.

The figure is bound to continue increasing because of the formation of new Diasporas in economically fast developing areas of the world like China, Russia, India and Brazil. Figures obtained from Africans in China during fieldwork for writing my book,

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