A shorter version of this article, which will be published here in two parts, was published by Pambazuka News.
Ever since The Economist declared that Africa was 'rising' in 2011 there has been a great amount of attention given to this new conversation about the continent. While in some ways the 'Africa rising' concept is a welcome reappraisal of Africa, it has been criticised for its vagueness and focus on tired cliché rather than detailed evidence. Financial growth in African countries has been strong for the last ten years. As a McKinsey report stated, "real GDP rose by 4.9 percent a year from 2000 through 2008, more than twice its pace in the 1980s and ’90s." This strong growth has continued while recession hit much of the rest of the globe and is even more impressive given the context of conflict in selected states lowering the overall average.
African countries are still dependent on various forms of external income. Foreign direct investment in 2011 amounted to $42.7 billion according to the UN. Aid programmes contribute $44 billion to African countries according to a UN policy brief from 2010. The importance of diaspora contributions is often overlooked.
Diaspora remittances to Africa represent an enormous sum - around £60 billion in 2012 from 30 million migrants - which represents huge potential and the overwhelming willingness of the diaspora to contribute. It is a large pot currently focused on short-term change but which would be better targeted at commercial opportunities, partnerships and structured investments aimed at promoting growth and sustaining change. It is clear that the intentions of African migrants are excellent; it is also clear that such intentions could be better channeled. Remittances are the first step in harnessing the potential of the diaspora.
The African Union has recognised the need to more clearly monitor money flows from the diaspora. Earlier this year, two workshops were organised in cooperation with the World Bank to attempt to work up some tools, policies and deliverables related to diaspora giving. Clearly, there is a need to improve this process. Even the basics of quantifying the size of the diaspora itself is difficult - the International Monetary Fund highlights that many different countries use different definitions of the word. From this point onwards, the picture of the diaspora and its contributions to Africa is blurred.
While the sums involved are vast, there is little in the way of specific data - the African Union still relies on data sets from non-African organisations - to judge the actual impacts of diaspora based interventions. It is possible that this money is changing people's lives and communities for the better; it is also possible much of the money is being wasted. The real problem, at the moment, is that there is almost no way of knowing which is happening.
The reality is that diaspora backed interventions are probably very welcome but are likely to be poorly managed. As in the world of traditional aid, measuring impact properly is key to delivering better projects and achieving lasting improvements. With financial flows, this can be a simple process - most people are aware of a cost/benefit analysis, for example - and there is no doubt that a framework for diaspora investments would go a long way to better usage. Other benefits that the diaspora give back to their countries of origin are less definite in value: ideas, experience, knowledge, expertise. These 'social remittances' are powerful and incredibly useful - if those too can be channeled into more specific schemes they become more measurable and more focused.