Since the late 1960s, when Africans started migrating to European countries to date, there has been a sharp inflow of remittances on the continent. In fact, these remittances spiked since the introduction of cell phones and electronic banking in Africa, and the remittances have remained a source of economic growth in the continent. Claim Your List Of 10 African Books To Read.
Aside from the remittances, another important source of foreign exchange in Africa is foreign aid that streams in from the governments of the western countries.
Remittances vs. aid have been a sizzling controversial topic among economists and development practitioners alike – which of these two will facilitate even development in Africa? With the growing population of diasporans, remittances have increased to the extent that it rival foreign aid.
The sharp increase in diaspora remittances stirred the AU to designate its diasporans as the sixth region. Though foreign aid helps increase government funds and all, it sometimes comes with a lot of conditions that will not help to promote the general welfare of the masses but to actualize the interests of the donor countries.
Foreign aid equally comes with some kind of dependency, in form of neo-colonialism. That’s not to say the disbursement of funds by foreign countries doesn’t contribute to even development in Africa, but to a large extent, the remittances by the diasporans have grown to rival the foreign aid.
If the remittances have grown to rival foreign aid, which of them will facilitate African development?
Remittances promote the citizen’s welfare. A country is said to have economic growth when the general welfare of the citizens improves, which counts of good hospitals, schools, and availability of infrastructures that knee-deep leads to a good standard of living. Remittances mainly work on welfare provision as the money is channeled to the grassroots level and families that lack good welfare.
The diasporans remit this money to help their relatives to acquire good living standards, establish businesses, and support themselves in school, as it’s what we all seek. Although the remittances are believed to be individualized, most African governments that incorporate a good diaspora engagement benefit from these remittances as they equally serve as their source of funds.
Ethiopia is the first African country to adopt this full diaspora engagement by initiating diaspora bonds that allow the government to gain from the diaspora’s remittances and assets. Other countries like Ghana, Cape Verde, and Kenya jostle to adopt the same measures and tap from their diasporans’ resources.
Dispersing remittances to the grassroots level will not only improve the welfare of the citizens but also increase the circulation of money.
However, foreign aid from its end doesn’t benefit all citizens. In fact, people hardly take cognizance of its inflow because the funds usually end up in the pockets of those in the seat of power.
As was reported by the world bank, Nigeria received foreign aid worth 3517320068 in 2019, but nationals can’t attest the funds were actually used in the provision of amenities and all.
Unlike foreign aid, with lots of conditions, sometimes not obvious, the remittances don’t come with any sort of conditions because diasporans remit the funds to their places of origin- their home. Hence, their reasons for remitting funds won’t be in the confines of acquiring gains and rather for the development of their home countries.
Foreign aid funds come with interest and ulterior motives, some of which may involve overhauling the public and private sectors to suit the needs of the foreign aid countries, introducing the structural adjustment programs, and all.
To some extent, foreign aid influences the recipient countries’ decision-making process, laws, and political norms for the benefit of the donor countries.
Foreign aid rips African countries’ sovereignty both directly and indirectly, thus warranting the African government to be subject to the whims and caprices of the donor countries, whilst the former (diaspora remittances) retains government sovereignty.
It’s deemed necessary that the African government set policies that would help attract and better use the diaspora resource for the continent’s development.
Additionally, the governments should allow diasporas to participate in the politics of their country- it’s no surprise most African governments give no room for diasporans to partake in the politics of their country because of their assumption that the diasporans are resources the country lost.
Tapping on the diaspora resources would be easy when the government implements and allows full diaspora engagement in politics.
In all, diaspora remittances funds, though remitted more to families, are far better than foreign aid and will incite development in Africa than the latter. Given these instances above, you will understand when there’s a good standard of living; there will be even development.
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