An estimated 17m of them today form the country’s vast diaspora, according to the Nigerians in Diaspora Commission (NiDCOM), established under the Federal Ministry of Foreign Affairs. They are working, setting up businesses and studying in the US, Canada, the UK, the Gulf and elsewhere. Alongside Kenyans, Ethiopians, Ghanaians and others of African origin they have been dubbed the continent’s “secret weapon”.
So large and important is Africa’s diaspora that the African Union officially declared it the continent’s “sixth region” after East, West, North, Central and South. In Nigeria “japa” regularly trends on social media.
The most vital question frequently asked however is; How great, though, is the diaspora’s true economic impact? And does it help African countries integrate into the global economy, or does it hold development back?
Analysts and economists reckon the diaspora exerts a mixed influence on African economies – but with better governance, deregulation and greater stability, the hundreds of millions of Africans toiling abroad could fuel a development boom of truly epic proportions.
“It’s on the political leaders just not creating the environment for innovation and talent to grow,” says Iyore James, a Nigerian-American doctor who heads the US-based Nigerian Physician Advocacy Group. Born in the US, she was raised in Nigeria and returned to America at 16 to attend university. Now 42, James says many in the diaspora have mixed feelings about prospects of life back home.
“Some people have just given up hope of any development happening and more and more want to get their family members to migrate,” she says. “And then you have those who still believe in some sort of change in leadership and these people actually go back, invest their time to create businesses and create jobs.”
It is estimated that around 70,000 skilled professionals emigrate from Africa each year across a plethora of sectors, stretching weak healthcare systems, forcing employers into an exhausting pattern of continual recruitment and worsening services from banking to technology.
The trend is not new. The African diaspora in the US skyrocketed from 80,000 in 1970 to over 2 million in 2015, according to the Pew Research Center. Adding their US-born children more than doubles the total. Nigerians lead the pack, with 327,000 Nigerian-born US residents in 2015, followed by Ethiopians, Egyptians, Ghanaians and Kenyans.
The UK issued 65,929 student visas and 15,772 work visas to Nigerians in the 12 months to June 2022, a massive annual surge on both counts. In Canada, Nigerians were the third-largest group granted permanent residency in 2021. These flows are not expected to end any time soon, with galloping inflation and hobbled African currencies hitting the salaries of professionals in Zimbabwe, Kenya, Nigeria and elsewhere and insecurity, poor education and healthcare – as well as dissatisfaction in political leaders.
The socio-economic role played by remittances
The clearest impact of Africans abroad comes in the form of the personal remittances they send to the continent, which dwarf foreign direct investment.
In 2019, Africa received $82.7billion in personal remittances, nearly double foreign direct investment (FDI) flows of $46billion. Remittances to Nigeria alone were $23.8billion compared to $3billion in FDI. Egypt saw remittances worth $26billionn. Those are just the formal, countable remittances. For war-torn Somalia, where conflict, insurgency and drought have choked growth for decades, funds sent from overseas are thought to represent more than a quarter of annual GDP, although data is hard to come by.
These payments provide a financial crutch to millions of households. This is why smaller, poorer and more fragile economies are so dependent on them. Africa’s top remittance recipients as a proportion of their economies are South Sudan, Lesotho and The Gambia with 35%, 21% and 15% of GDP respectively coming from remittances, according to World Bank statistics. Between 2004 and 2017, remittances as a share of GDP grew from 1% to 7.5% in Ghana.
“Nigeria would have recorded a current account deficit if remittances had been lower by just 27%” in 2021, says Francois Conradie, politics and economics lead at Oxford Economics Africa.
“Remittances from the diaspora constitute one of the major sources of revenue in many African countries. Unlike foreign direct investment flows, remittances directly reach the most vulnerable and are less likely to end up in the pockets of corrupt officials,” says Aleix Montana, Africa analyst at Verisk Maplecroft, a risk intelligence company.
Across sub-Saharan Africa, where farming supports at least 50% of livelihoods, remittances supplement agricultural incomes. They diversify income sources in African households and allow recipients to invest in health and education, lowering their exposure to food insecurity and poverty.
“In periods of crisis, remittances play a key role in protecting vulnerable communities where governments fall short,” says Montana.
Such a crisis emerged when the coronavirus pandemic hit in 2020, fuelling concerns that African economies are over-reliant on personal remittances. Covid-19 torpedoed wages and employment for millions of migrant workers, particularly those working in restaurants, hotels and retail in developed countries amid lockdowns.
This presents the extent to which remittances form a cornerstone for African economies as they serve to cushion the livelihoods of families back home. At national level, they cover the huge social amenities gap that African governments fail to provide.
Sources: African Business