– Rising economies, start-ups, and Black wealth, etc.

Diaspora Remittances Driving Local African Development

A customer deposits money at an "Orange Money & kiosk on June 29, 2015 in a district of Dakar.

By Chiek e Tidiane Wade

Remittances, investments and expertise from Africa’s 160 million strong diaspora are vital for the continent’s future growth.

This is the conclusion reached by the African Development Bank at a forum held in December 2022 in Abidjan, Côte d’Ivoire.

More and more, African mayors are expressing their wish to turn to diasporas for financing local development.

This article aims to explain how the investment of emigrants can contribute to the financing of community development in Senegal.

In the context of decentralization and territorialization of public policies, migrants and the private sector could play a leading role vis-à-vis local authorities affected by migration. Indeed, local authorities are at the forefront of managing the impacts, both positive and negative, of migration.

Senegal’s local authorities have in common that they are confronted with two major phenomena that structure and restructure economic dynamics. These are climate change and globalization in a context of permanent mobility linked to migration.

Including territorial dynamics in our development objectives means considering these spatial and human entities as carriers of new, more adapted economies.

Migrants’ funds as alternatives

Indeed, according to the Economic Commission for Africa, migrant remittances to the continent reached $41 billion in 2021. This represents more than double the official development assistance granted to Africa.

It is a question of finding appropriate financing in a context where migrants’ remittances, well supervised, are solid alternatives.

In Senegal, according to a report published by Afford (2021), the diaspora is 642,654 strong, or 3.7% of the population. While the majority of Senegalese emigration flows are within the African continent, 47.6% of them are established in the countries of the European Union.

The Senegalese diaspora also accounts for US$2,562 million in remittances per year, representing 10.5% of the country’s Gross Domestic Product (GDP), according to the same report. That is considerable! Through these transfers, the diaspora plays a leading role in raising the standard and living environment of families left behind. It thus contributes to the efforts undertaken by governments to fight poverty and promote the economic inclusion of populations, including the most vulnerable.

Migrant associations are active in addressing the adverse effects of climate change through financing and investment in infrastructure, means of production and agricultural equipment. They also contribute to the financing and development of income-generating activities, the adoption of non-agricultural activities, and the diversification of agricultural activities.

Thus, properly supervised, migrants’ remittances can make it possible to find appropriate financing and constitute solid alternatives to the strengthening of the financial resources of local authorities. Each year, a minimum allocation of 12 million CFA francs (about US$19,000) is paid to each of the 557 local authorities. The Decentralization Endowment Fund, which is very weak for a better territorialization of the Sustainable Development Goals, is being restructured. It is an ambitious reform that aims to refocus resources on the real objectives of the fund.

Non-financial transfers

Diaspora associations and migrants as individuals continuously contribute to the dynamism of the economy through cash transfers and non-financial transfers. In reality, migrants transfer more than money. They bring back a commitment to development, partnership networks, means of production and tools and machines to respond to the adverse effects of climate uncertainty.

In addition, migrants can invest in real estate in cities like Dakar or in villages. The benefits of these investments are intended to finance alternatives to the effects of aridity and climate uncertainty.

Emergency aid to populations is thus financed from more stable sources and less subject to the impacts of climate change on the natural capital and economic activities of rural areas. At the same time, these financial flows help connect the local economy to the national and global system.

Housing is a preferred sector for investment by Senegalese migrants. This land and real estate appropriation has multiple effects on society and the urban fabric. In the face of climate risks, it is necessary to take into account climate-related opportunities and uncertainties.

Improving the links between the investment of emigrants and the priorities of management (local authorities, non-governmental organizations, development projects, etc.) should be achieved by taking effective account of the potential of emigration.

Better channeling investments

In other words, the development plans of local and regional authorities should be more sensitive to these two determining parameters of territorial development. Migrants and diaspora associations must be able to take advantage of support mechanisms and platforms to better channel their investments.

With the installation of the antennas of the reception, orientation and monitoring  of Senegalese Offices from abroad at the level of the Regional Development Agencies, several opportunities are offered to migrants who want to invest in their land.

These offices will contribute to efforts to implement a Senegalese migration policy adapted to national and international developments and oriented towards a logic of development. Notable success in support projects for returnees have placed great emphasis on the effective dissemination of information both in Senegal and in the country of origin of returnees.

In the future, it will be a question of privileging information focused on opportunities for Senegalese with skills that can be invested in Senegal (valorization of the expertise of the diaspora). It should also include those wishing to be accompanied for the implementation of their investment projects on site.

For example, it would be interesting if the leaders of the various professional sectors operating in Senegal could say precisely their expectations vis-à-vis returning migrants as well as the employment and investment opportunities they could take care of. In other words, it is a question of making information “practical” for returning migrants so that they can very quickly be in a position to invest or even produce.

The Government of Senegal recognizes the contribution of migrants, so the expertise of the diaspora is included in the Plan Senegal Emergent, the country’s development framework, which incorporates a flexible and optimized use of the technical and scientific resources of the diaspora.

The place of the diaspora in national economic and social development also finds a tremendous opportunity in the implementation of Act III of decentralization. Indeed, the networks of the Senegalese diaspora could constitute in the medium and long term levers of sustainable development with the advent of territorial poles as envisaged by Act III of decentralization.


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