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African diaspora 'source of development funding'

Participants attending a session of the Global Diaspora Forum 2013 in Dublin. (Image source: Global Diaspora Forum)

The Global Diaspora Forum held in Dublin drew focus on the African diaspora communities that are increasingly becoming viable sources of development funding

African financial institution Dahabshiil CEO Abdirashid Duale said that governments and the private sector needed to work together to better leverage this vast source of capital inflow.

Speaking at the third annual Global Diaspora Forum, Duale spoke about the increasing government interest in the remittance market referring to the estimated US$60bn a year that Africa received from its migrant communities.

The CEO said, “Remittances to Africa are a vital source of revenue, which helps to fuel economic growth and boost household incomes to keep millions of people above the poverty line. It is no surprise therefore that policymakers are looking at ways to harness the development potential of diaspora remittances.

“In Africa, more needs to be done at government level for diaspora money to be the kind of catalyst for growth from which the Asian powerhouses such as China and India have benefited.”

Remittances to Africa exceed official development aid by around 50 per cent, while for most African countries the amount sent home by migrants surpasses foreign direct investment. The average amount of most transactions remains between US$200 to US$300, which is enough to support an average family for a month in the majority of nations on the continent.

The role of technology, particularly the internet and mobile, in delivering financial services was also high on the agenda at the Dublin conference. Approximately 33 per cent of Africans own a mobile phone, a figure which has been growing rapidly.

Duale noted, “The growth of mobile banking throughout the Somali territories is now starting to yield important benefits, raising levels of financial inclusion and allowing people to save and to plan for the future.”