How Diaspora Influx Increases Cost of Living for Africans

Francis Adotey has lived on Oxford Street in the popular Accra neighbourhood of Osu all his life.

The street, known for its many supermarkets, restaurants, nightclubs and pubs, is seen as the heart of Accra. And for a long time, Adotey was happy to live in the neighbourhood.

But these days, the 45-year-old pharmacist, his wife and three daughters go to hang out or shop outside Osu because of the increasingly expensive prices of food, groceries and household items there.

“I will spend at least $100 if I were to take my family to a restaurant here in Osu,” Adotey told Al Jazeera. “I can’t afford it because my [monthly] take-home pay is approximately $300. It never used to be like this until some three or so years ago when Ghana became the centre of attraction across the world.”

“The restaurants are charging according to the pockets of the foreigners. … The shops are targeting the expatriates because they have the financial wherewithal, and that is driving the locals away,” he said.

Year of Return

In 2018, President Nana Akufo-Addo launched an initiative to encourage the African diaspora to visit the continent.

Called The Year of Return, it was marketed as a spiritual journey of reconnection, especially for African Americans, to a land from which people were carted away into slavery. It was also sold as a chance to contribute to the economic growth of the first sub-Saharan country to achieve independence from colonialism.

It was, on the surface, a masterstroke from Akufo-Addo.

According to the Ministry of Tourism, Arts and Culture, 750,000 visitors came in 2019, mostly from the United States, to be part of the activities and $1.9bn was injected into the economy. The Diaspora Affairs Office, established in 2017, said at least 1,500 African Americans have moved to Ghana since 2019.

The COVID-19 pandemic slowed the influx of visitors, but the authorities launched a 10-year project called Beyond the Return, in December 2019 to continue engaging with the diaspora community.

Tourists continue to troop in, especially in December when a series of concerts and parties are held. Famous visitors include Usher, Ludacris, Kendrick Lamar, Gabrielle Union, Danai Gurira, Rick Ross, SZA, Meek Mill, Chance the Rapper and Steve Harvey.

“These events and A-list stars who visited Ghana put the name of the country on the world map even at a time the country was going through serious economic crisis,” Lauretta Asare, an events organiser in Accra told Al Jazeera. “Ghana’s economy was badly hit by the pandemic with inflation hitting the roof amidst high cost of living, but … they have the capacity to spend to keep the economy afloat a bit.”

African Americans who have come to Ghana to stay have ventured into business fields that include real estate, transport, technology and entertainment. To help them settle in Ghana, the government has provided incentives, including negotiating with local chiefs to give them prime areas to buy land. It has also waived survey and registration fees for members of the African diaspora and granted those who have lived in the country for many years citizenship.

“We want to make access to lands and other opportunities easier for them to make them feel at home and also see themselves as Ghanaians,” Akwasi Awua Ababio, who is in charge of diaspora affairs at the Office of the President, told Al Jazeera. “They are bringing their expertise to help us develop, and it’s a win-win approach.”

Ras Jomo, whose small shop sells African print fabrics, beads, bags, dresses and artefacts carved from wood at Osu, is happy about his new patrons.

“Ghanaians complain too much. They are always asking for a reduction. The African Americans don’t complain. They buy without bargaining, so we double the prices,” Jomo, 35, told Al Jazeera. “I don’t see it as cheating. It’s normal. We are only finding smart ways to survive.”

The situation has put pressure on Accra locals as prices of everyday goods rise beyond their reach in a country where a quarter of the population lives on less than $1 per day, according to the Ghana Statistical Service.

Kokrobite, a town 30km (19 miles) west of Accra is known for its white-sand beaches, traditional sea fishing and lively nightlife. But many plots of land along the Atlantic beachfront have been sold to people from the diaspora, locals said.

“As a Ghanaian and an indigene from this town, I need to pay to gain access to the beach because the lands have been sold to the foreigners,” Emmanuel Abutiate, 32, told Al Jazeera. “We can’t even afford to buy a plot of land in our own communities because it costs an arm and a leg because of these foreigners.”

Erieka Bennett, head of mission of the African Diaspora Forum and adviser on diaspora affairs to Akufo-Addo, said locals ought to welcome those from the diaspora as their brothers and sisters.

“Ghanaians must see us as one of them and not as cash cows,” Bennett, an African-American who has spent the past 30 years of her life in Africa, told Al Jazeera.” We are charged more when we are buying items, including property.”

“We want them to see us as part of the community. We have African Americans who are doing incredible things here in Ghana. We have schools, and we support orphanages among other charities,” she said.

Akwasi Agyeman, chief executive of the Ghana Tourism Authority, agreed.

“We’ll keep sensitising traders to be mindful of their actions that could be inimical to the government’s initiative to make Ghana the destination of our brothers and sisters in the diaspora,” he told Al Jazeera.

‘A great deal of headaches’

Since the discovery of oil in Ghana in 2007 led to an influx of expatriates, the West African country has experienced rent surges that have worsened as diaspora settlers have arrived. Property owners are also pegging rents in US dollars.

According to a July study conducted by Accra city authorities and the Clean Air Fund, the booming real estate sector has led to a drastic reduction of green spaces in the past two decades and an estimated loss of $2.5bn annually to pollution.

Individuals are selling their homes to real estate developers, who are buying in dollars to convert those properties into apartments targeting returnees. More and more Ghanaians are now leaving Accra for suburban communities.

“My landlord came to inform me one early morning in 2022 that he was increasing the rent from $111 to  $800 a month,” Benjamin Kumah, who used to live with his family of three in a three-bedroom house in East Legon, a prime real estate area in Accra.

“I couldn’t believe my ears,” the 55-year-old, who operates a small transport business, told Al Jazeera. ”I had to move because that’s even more than what I earn a month. The place is now being occupied by a British couple and their kids.”

Cranes and deafening sounds from drilling machines and concrete mixers at construction sites in highbrow locations like Cantonments, Labone, Osu, Spintex, Airport West and East Legon are now a common sight. Billboards advertising studios and penthouses with rents ranging from $82,000 to $270,000 annually, dot the capital.

Daniel Anim Amarteye, an economist with Accra-based Policy Initiative for Economic Development, said the situation is causing the economy “a great deal of headaches”.

“It is a critical issue within the domestic economy because people turn to have a high appetite for the dollar and invariably affect the pricing of goods and services,” he told Al Jazeera. “So more importantly, the real estate sector where houses are priced in dollars ends up inflating the value because of the exchange rate and that invariably adds to the inflation pressure that we are experiencing.”

Ghana, a major exporter of gold and cocoa, is grappling with its worst economic crisis in decades. Its inflation rate has slowed for a fourth straight month but was still 41.2 percent in April, and it recently accepted a three-year, $3bn support programme from the International Monetary Fund.

As part of efforts to curb inflation, the central bank has repeatedly warned against denominating rents in dollars. However, some landlords say they are doing so because foreign exchange fluctuations affect building materials, most of which are imported, and because dollar pricing is relatable to the target market – people from the African diaspora.

As the cost of living increases, people like Adotey are concerned that things could worsen in future.

“I won’t be surprised that a time will come when the people originally from Accra will rise up because they are losing their lands to foreigners. The government must address the situation now, else in the next five or so years, some of us might be forced to relocate to areas we can afford [outside Accra],” he said.