Editor’s Note: January 28, 2019
What happened to the diaspora investment boom?
Remittances to developing countries hit $528bn in 2018 according to the World Bank. Of this $45bn is thought to have gone to sub-Saharan Africa, more than total foreign direct investment (FDI) of $40bn.
For years governments and businesses have sought to harness such flows to drive development on the continent, touting the diaspora as the next big thing in investing.
From diaspora bonds, to dedicated investment platforms, much has been done to unlock its perceived potential. Given the volume of remittances It makes intuitive sense, but success has been sporadic at best.
The problem is likely an overestimation of the number of people in the diaspora with both the capital and desire to invest back home. Exact data is unavailable, but a plausible scenario is that the bulk of remittances are small cash transfers from people making ends meet.
Nigeria’s $300m diaspora bond raised in 2017 – one of the few sizeable examples of diaspora investment – is a case in point. The sale is said to have been restricted to private banks and wealth managers, effectively barring most of the diaspora from the exercise.
Africans abroad are a crucial lifeline for millions on the continent, but their credentials as a force for investment are looking questionable.
From The Continent
Tunisia’s prime minister Youssef Chahed and other political leaders have launched a new party, Tahya Tounes, to challenge the ruling Nidaa Tounes movement of president Beji Caid Essebsi. This comes ahead of general elections in November, and amid growing public opposition to IMF-backed austerity measures. More: Al Jazeera
Sudan’s president Omar al-Bashir Bashir has called intensifying protests against his 30-year rule an attempt to ‘copy’ the Arab Spring of 2011, while accusing unidentified foreign groups of trying to destabilize the region. His comments came during a trip to Egypt on the weekend, part of efforts by the longtime ruler to shore up political and economic support. More:Africanews
The Daily Stat
The amount South Africa’s agricultural industry body AgriSA hopes to raise to help farmers hit by drought over the last year. More: Reuters
The Global Perspective
Nigeria’s government has warned against foreign ‘meddling’ following international criticism of president Muhammadu Buhari’s decision to suspend the country’s chief justice ahead of presidential elections on February 16. The move risks raising tensions ahead of what is expected to be a tight vote, and has prompted the main opposition party to halt campaigning for 72 hours in protest. More: Reuters
The International Monetary Fund is set to release the fifth tranche ($2bn) of Egypt’s $12bn loan taken out in 2016. The programme is part of an ambitious economic reform programme under Abdel Fattah el-Sisi. More: The National