Why African diaspora is attracting new attention

• Expatriate Africans represent growing market for all kinds of specialised services

The freezing January weather in southern Maryland on the east coast of the United States could not be more different from that of Igboland in eastern Nigeria. But for years, that has not put off Clement Igbokwe, a former financial analyst turned grocer.

For the record, he is no ordinary grocer. He specialises in everything members of the African and Caribbean diasporas in his area might want. That includes stocking stuff that can only be sourced from specific African countries.

For Kenyans, that includes the Unilever food seasoning Royco that largely defines the peculiar culinary habits of Kenyans in all corners of the world.

For Nigerians, it is the soft drink Fanta — in a glass bottle and sourced directly from Nigeria!

Denizens of other countries are pampered with dried fish and chicken and baby food Cerelac straight from the home country.

But it is not just Africans abroad who are patronising the likes of Mr Igbokwe. Financial solutions providers and other business interests are stalking the African diaspora for their dollars, widely acknowledged in central bank reports on capital accounts.

The facade of his grandly named J & J International Food Store is covered by signs of money transfer firms Western Union and the Kiswahili-featuring latest addition, Kenya’s own innovation, Safaricom.

The two money transfer firms linked up a month ago, adding to Safaricom’s own transfer system aimed at the Kenyan diaspora in the United Kingdom.

“We have seen only a few Kenyans coming to use the service, but I believe that is because it is new,” said the Nigerian trader, one of over 400,000 Western Union agents in 200 countries. He volunteers that the money transfer business has been a big boon as Africans come in to shop as well as send money home.

Collectively Africans from sub-Saharan Africa transferred over $11 billion home (2007 World Bank numbers), and an African Development Bank study showed in a number countries surveyed, this accounted for between 9 and 25 per cent of their home countries’ GDPs.

In Kenya where Central Bank has been seriously tracking the inflows, the amount in 2008 hit $611 million (Sh45.8 billion). By November of 2009, $552 million had been remitted to Kenya.

But that includes only formal channels like the banking system, bureaus and money transfer systems.

“Our survey shows that monthly remittances inflows have normalised to average $50 million during the eleven months to November 2009,” said director of research Charles Gitari Koori in remarks posted on the CBK web site.

For Africans, the motivation to send money home ranges from family-based philanthropy to business. It is the business part that is attracting governments and financial solutions providers alike.

A week ago at an African Diaspora Marketplace (ADM) event, a number of African diaspora entrepreneurs were awarded matching grants for business with impact on job creation back home.

Some 14 start-ups and existing businesses in seven countries were awarded grants ranging from $50,000 (Sh3.8 million) to $100,000 (Sh7.5 million) at the forum sponsored by Western Union Company, Western Union Foundation and USAid with involvement of pan-African transnational, Ecobank Transnational International.

The only winner for a Kenya project was Raymond Rugemalira of California whose E & M Capital Corporation won an ADM business grant for SMS messaging seeking to bring efficiency to buyers and sellers of farm produce, livestock or livestock products in Kenya.

“I want to help improve the lives of small-scale farmers by offering them markets via mobile phone technology so that they can concentrate on what they know best to do, which is to farm,” he said.

Of interest to East Africa is a new ferry service between Mwanza, Tanzania, Entebbe, Uganda and Kisumu in Kenya. A manager with EarthWise Ventures, the winning firm behind the investment, told Sunday Nation that the first ferry will set sail on May 1.

Empowerment

“We are excited to move forward and see these plans come to fruition and foster economic development in sub-Saharan Africa,” said Western Union’s Anne McCarthy, executive vice-president of corporate affairs whose firm has been implementing an economic empowerment programme called “our world, our family”.

But while the economic impact of the diaspora has been readily acknowledged, there has been little effort to tap the potential in Kenya despite well-publicised pledges. However, in Egypt and Ethiopia, elaborate systems are in place.

Ethiopia, for instance offers 70 per cent financing for projects by diaspora members, a factor that has spurred heavy investment, especially in horticulture. With an estimated 1.5 million population, the Ethiopian diaspora sends Sh75 billion home.