Africans in Diaspora sent $32.9 billion home to Sub-Saharan Africa in 2014
With this startling insight into just how serious it really is to receive money from relations in the Diaspora or “abroad” as commonly called in Nigeria, the question we should be asking is, can Africans in diaspora be the next platform for seed investors for businesses in Africa?
Looking at todays capital market in most African countries, interest rates are astronomically high making credit very expensive, there isn’t enough inflow of FDI (Foreign Direct Investment) as local market conditions do not justify the opportunities — only 1% of global PE (Private Equity) is active in Africa, there is clearly a need for a different source of capital for small businesses within Africa.
If Africans working in OECD (Organisation for Economic Co-operation and Development) countries send billions of dollars back home annually for the upkeep of their families, then how much more can be possible if they can be introduced to the opportunity of seed investments in African startups with the potential for high impact within the society?
A potential way of making this happen is the conversion of the bank charge on remitting money into a Diaspora Development Fund.
Another is to educate Diasporan Africans on how they can contribute to the development of the African small business economy