How Africa Can Make the Most of Diaspora Finance
Remittances by the African diaspora might lack the structure and formality of traditional philanthropy, but they play a central role in keeping people out of poverty and advancing community prosperity. Formal donors should be seeking ways to amplify their impact.
LONDON – The African diaspora is the biggest funder of change on the continent. Since remittances are informal, often unreported, and narrowly targeted, they tend to be overlooked. But their scale is large, sustained by diasporic Africans’ powerful commitment to improve the lot of family members and communities they love. Formal givers like me should not only learn from this, but also seek opportunities to collaborate with the diaspora to strengthen its members’ impact.
In 2022, the 160 million Africans who live outside of the continent sent home more than $95 billion in remittances. Of that, about $53 billion went to countries in Sub-Saharan Africa, with Nigeria, Ghana, Kenya, and Zimbabwe the top destinations. This compares with $30 billion in foreign direct investment and just $29 billion in official development aid for Sub-Saharan Africa.
Notably, FDI and aid declined last year, as global challenges, such as surging inflation and the Ukraine war, caused donors to reduce or redirect their giving. But remittances increased for many of the same reasons: Africans in the diaspora knew that their families and communities were grappling with food insecurity, as well as natural disasters like floods and severe drought.