Africa’s $110b migrant resources could fund continent’s infrastructure - Afreximbank President
Africa’s migrant resources, which amount to more than $110 billion, could be a major source of funding for key infrastructure projects across the continent if properly harnessed, Dr. Benedict Oramah, President of theAfrican Export-Import Bank (Afreximbank), said in Washington D.C last week.
In a keynote address to the Frontier 100 Forum organized by the Initiative for Global Development, President Oramah said that those resources, composed of $53 billion of savings and $63 billion of annual remittances, were well in excess of the continent’s annual infrastructure financing requirements, currently estimated at about $93 billion.
He noted that since the early 2000s, migrant remittances had become the most important source of foreign currency inflows for many African countries and had become more important than foreign direct investment (FDI) as a source of foreign exchange in many.
“In Nigeria, migrant remittances, at about $20 billion in 2015, were about four times the size of FDI inflows and about 20 per cent of merchandise export receipts in that year,” noted the President. “Similarly in Egypt, migrant remittances represent some 72 per cent of export earnings and four times the size of FDI inflows. In relatively smaller economies, such as Cape Verde, Comoros, the Gambia, and Sao Tome and Principe, migrant remittances are at least twice the size of the value of export earnings.”
Dr. Oramah regretted that many Governments were yet to put in place policies and programmes to effectively harness the many significant benefits offered by the Diaspora, saying that lessons could be learned from the experience of countries like the Philippines, Israel, Bangladesh, India, and Mexico that had robust programmes to improve Diaspora participation in national economic activities.
He noted, for instance, that the Philippines allowed its citizens to enroll in, or continue, their social security coverage while abroad while workers were free to continue contributing to the Home Development Mutual Fund.
The President said that Afreximbank had integrated the Diaspora in its intra-African Trade Strategy, given the Diaspora’s size and importance as well as the experience of other countries. That Strategy regarded the Diaspora as the 56th African State.
“Our goal is to strengthen and support the supply chains between Africa and Africans in the Diaspora; facilitate investments in Africa by Africans in the Diaspora; support joint ventures between Africa and Africans in the Diaspora, especially in making strategic acquisitions in Africa or in the Diaspora country,” he said, adding that Afreximbank also aimed to support businesses operated by the Diaspora population that linked up to Africa.
Dr. Oramah announced that Afreximbank was in discussions with New York University to collaborate on a major study to estimate the size of the African Diaspora economy; identify leading activities; establish supply chains for African ethnic goods and the size of the market for such goods; and ascertain the financing needs of Diaspora businesses, etc.
In addition, the Bank was implementing an initiative to support the development of quality certification centres across Africa in order to facilitate export of certain kinds of goods from Africa to the Africans in the Diaspora as a way of boosting trade, he added.
Also yesterday, Dr. Oramah participated as a special guest of honour in a high-level panel discussion on “Mobilising Resources towards Infrastructure Development in Africa” organised by the U.S. Africa Business Center of the U.S. Chamber of Commerce.