The Possibility of Diaspora FDI for African Entrepreneurs

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The Possibility of Diaspora FDI for African Entrepreneurs Image Credit: huffingtonpost

According to the World Bank, remittances sent to Sub-Saharan Africa have increased by 2.2% in 2014. This is expected to grow by as much as 3.8% in 2016 and 2017

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

Read 961 times Last modified on Tuesday, 21 July 2015 20:16
Tele David Deko

He is a business & technology consultant with years of experience advising and working with companies in different industries spanning countries in Sub Saharan Africa (Energy, Renewables, Marketing, IT, Real Estate, Hospitality, etc). He also has hands on experience as an entrepreneur coordinating the activities of Ackuit between Nigeria, Ghana & the United Kingdom.

2 comments

  • Comment Link Segun Segunpreneur Ogunlana Jul 23 2015 posted by Segun Segunpreneur Ogunlana

    @Siji; interesting proposition with your currency project and what will be more interesting is how this is executed. Please keep us in the loop. Willing to learn & get entertained. Cheers!!

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  • Comment Link siji Jul 22 2015 posted by siji

    Credicoins Network is looking at solving this problem, partially, with our unique solution of creating an online world for all Africans all over the world where a currency (Credicoins) is being spent, saved, transferred and earned. We hope to be up and running soon, God willing.

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