Local communities are vital in the fight against the pandemic

Ibrahim Mayaki

Local African organizations are making a major contribution to containing the pandemic. Over time, they have demonstrated their social usefulness and their capacity for resilience.

AUDA-NEPAD very early on understood the magnitude of the pandemic and the importance of a coordinated continental response. We have forged partnerships and mobilized resources, setting up a Coronavirus fund that has $20 million in pledges. Our response plan covers strategic areas of public health and broader public policy, and also supports the private sector which is severely impacted by the global recession. Our action plan focuses on the following seven areas: Health service delivery; human resources for health; research, development, innovation and local manufacturing; education and training; skills and employability; food and nutrition security; and finance.

Local development agents, and political, civil society and religious leaders are on the ground, communicating closely with communities on a daily basis, to raise awareness of the fight against the virus. The measures put in place over the last decade to combat the various epidemics, particularly the Ebola virus, have made it possible to ensure that infrastructure, people and resources can be mobilized quickly.

Sierra Leone built community health centres to keep up with its Ebola cases. They were used to quarantine and treat those who could still be infected. A network of caregivers, trained medical auxiliaries to assist them, village community members, and regional officials made it possible to detect, isolate the sick and educate families to prevent the spread of the virus. This system has proved its worth; the last Ebola case in Sierra Leone was treated in early March 2020, a few days before the first case of Covid-19 was declared in the country.

“Across the continent, whenever we have had to make a concerted effort, we have been able to rely on our local networks, committed to community service.”

The lessons learned from this experience enabled the country to anticipate the spread of the next pandemic. A similar network was created in Nigeria to contain polio. Now, this network of more than 7,000 healthworkers across the country has been trained in record time to detect any suspected cases of Covid-19. There are many more examples of local networks in Ghana, Senegal, Morocco, Ethiopia, Rwanda and throughout Africa that have agilely and resiliently taken over from governments to prevent the spread of the virus.

AUDA-NEPAD is aware of the central role of our traditional, religious and local communities in the inclusive development of the continent. Agenda 2063, adopted in 2015, relies on traditional organizations to support our development policies. Across the continent, whenever we have had to make a concerted effort, we have been able to rely on our local networks, committed to community service.

African societies are societies of communities, not individuals, a fabric made resilient by countless interwoven struggles tackled side by side. They structure social ties and support economic development, even more so among young people, women and vulnerable populations. They safeguard our cultures so that they can withstand the passage of time, in the face of the worst disasters, including health disasters. The management of the Covid-19 pandemic, particularly in Western countries where there is less culture-based community interaction, reminds us of the solutions we have. And perhaps the rest of the world could learn from it.  

Giving ourselves a chance to make AfCFTA a success

Ibrahim Mayaki

AUDA-NEPAD and Frederick S. Pardee Center for International Futures (University of Denver) jointly publish a study on the conditions for successful implementation of the African Continental Free Trade Agreement. Here are the main findings.

Since the creation of the Continental African Free Trade Area (AfCFTA) endorsed at the African Union Summit in Niamey on July 7, 2019, we have been pushing forward the idea that a common market for and by Africans is possible and create a single market for goods and services to facilitate the free movement of people and investments and lay the foundations for a continental customs union. We continue to promote this economic integration among Heads of State and Government, emphasizing the sharing of economic benefits over historical rivalries and relative gains.

This study is part of this process. It provides an overview of all the local and international challenges likely to increase or hinder the implementation of the agreement. It thus enlightens African decision-makers by providing them with objective figures to guide them in their decision-making. For the prerequisite for the implementation of the AfCFTA remains the political will to advance intracontinental trade relations. This will require stakeholders to coordinate and harmonize trade policies at the national, regional, continental and global levels.

Rethinking government revenue sources
 The AfCFTA calls for the elimination of 90 per cent of tariffs on intra-African trade, which for some countries dependent on these taxes could represent a drop-in government revenue and thus an obstacle to the success of the agreement. However, according to data from the study, intra-African tariffs are low relative to tariffs between Africa and the rest of the world. About 1.5 per cent of Africa’s GDP or $37 billion comes from tariffs on imports from the rest of the world. In comparison, tariff revenue from intra-African trade represents only 0.1 per cent of African GDP in 2015 or $3.5 billion. Thus, the implementation of the AfCFTA will have a limited negative effect on government revenue at the continental level.

“Conditions for the success of AfCFTA also include reducing non-tariff barriers to trade, such as poor governance, lack of infrastructure and border crossings, and the prevalence of informal trade”

Capacity building and support for the most fragile states
 In addition to customs duties, the entire taxation system will have to be harmonised, particularly VAT. Many countries are unable to manage these new standards. Rigorous training of customs union officials and capacity building in each Member State are essential. For the least developed States, more direct assistance in the form of training sessions, economic assistance and guided institutional development will need to be provided by AfCFTA and partner organizations (Assembly of the African Union, twelfth special session, 2019). The study emphasizes that the success of VAT control will depend on reducing the levels of corruption associated with revenue taxes among government elites.

Tackling non-tariff barriers
 Conditions for the success of AfCFTA also include reducing non-tariff barriers to trade, such as poor governance, lack of infrastructure and border crossings, and the prevalence of informal trade; diversifying exports for intra-African trade, including by increasing local manufacturing production; and strengthening the monitoring of cross-border flows of goods and services.

Reducing costs as part of the AfCFTA
To ease tensions within the AfCFTA, the study calls for the creation of a dispute settlement mechanism to resolve issues between member states. It also suggests exploring an African Union Development Fund that could support countries experiencing social upheaval due to increased trade openness by investing in human capital, infrastructure and improved governance.

Thus, the removal of all these barriers to trade, good governance and the development of infrastructure, including information and communication technologies, are essential conditions for the success of the AfCFTA. With this in mind, AUDA-NEPAD will ensure that all resources are mobilized so that the signatory states can make this immense project a real opportunity for growth for all Africans.

 

The report can be accessed here

Creating professional opportunities to silence the guns

Ibrahim Mayaki

In the aftermath of the 33rd African Union Summit on the theme “Silencing the guns”, we reaffirm AUDA-NEPAD’s role in peacekeeping in the name of economic and social development.

When Agenda 2063 was published, we had set a deadline of 2020 for the silence of arms. Once this dramatic observation has been made, we must draw the consequences and take the measure of what we must change or improve in order to guarantee peace and security for all Africans, which is an indispensable prerequisite for the development of our continent.

Our vigilance is unremitting so as not to leave any room for the proliferation of weapons. We must continue to reject violence and conflict. To this end, mechanisms for diplomatic cooperation and conflict resolution must be favoured, in line with the logic of  “African solutions to African problems”.

Fighting the symptoms, certainly, but we also need to treat the root cause of the disease. And to achieve this, we will need to accelerate and amplify Africa’s economic and social development. The reforms undertaken are intended to be replicated and extended across the continent to meet basic human needs, including education, health, sanitation, food security, housing, drinking water and energy. The AU, the RECs and Member States have the primary responsibility for implementing development policies and programmes aimed at integrating the continent and having a positive impact on the livelihoods and well-being of all Africans, especially the youngest.

“We will continue to promote peace through job creation, through initial and vocational training in both urban and rural areas”

Thus, AUDA-NEPAD focuses on vocational training and entrepreneurship for women and youth by supporting the integration and alignment of TVET (Technical and Vocational Education and Training) in the national qualification frameworks of fifteen countries, from South Africa to Tunisia, Benin and Sierra Leone. The Agency is also involved in capacity building in the agricultural sector of twelve CAADP countries TVET. The EFPTA (Technical and Vocational Agricultural Education and Training) programme for women is already fully operational in six countries.

With the Skills Initiative for Africa (SIFA) programme in seven countries, we are supporting the empowerment and skills development of young people.  National action plans for rural youth employment and entrepreneurship have been developed and validated in Benin, Cameroon, Malawi and Niger.

The 100,000 SMEs for 1 million jobs programme also aim to create opportunities for 1 million young people by 2021. Recommendations have been made to encourage initiatives to accelerate the reforms needed to improve the business environment and promote youth entrepreneurship.

Clearly, on a continental scale, these programmes are necessary but not sufficient. We will continue to promote peace through job creation, through initial and vocational training in both urban and rural areas, through the development of the health sector, through the protection of nature and the fight against global warming and its consequences in terms of population displacements, through the interconnection of countries and regions to facilitate trade and thus openness to others. We will continue to build and rebuild bridges and roads between peoples, where others are destroying everything in their path. 

Giving meaning to collective action

Ibrahim Mayaki

On the eve of the 33rd Summit of the African Union, which will be held on February 9 and 10 in the presence of all the States of the continent, it is essential to recall the ties that unite us. Reinvesting in our territories, strengthening our economic regions, abolishing customs borders, and freeing ourselves from external constraints are all elements that will enable us to regain the meaning of our actions and stimulate our ability to unite around common values.

A paradigm shift is needed

The new decade that is beginning holds out the hope of a paradigm shift if we respect what we preach. Our continent, whose youth and dynamism are its real wealth, must meet the high expectations of social justice and equity in the distribution of wealth of a population that is increasingly integrated around a globalized conception of economic and political life. We have no choice but to rethink our relationship to ourselves and to the rest of the world. To this end, from now on we have sought to include and involve our youth in the design and implementation of Agenda 2063, our continental vision of socio-economic transformation.

Play as a team

Since its recent establishment, the African Union Development Agency (AUDA-NEPAD) promotes regional economic integration, cross-border projects and aims to strengthen its cooperation with the regional economic communities. The launching of major PIDA priority projects – the North-South or Abidjan-Dakar corridors, the Abidjan-Lagos coastal corridor, the Dakar-Bamako railway lines, the Zambia-Tanzania-Kenya Transmission Line (ZTK) and so many other achievements – is the fulfilment of our wish to work together. Henceforth, the progress of regional integration is moving in the direction of an interconnected continent, obviously transcending borders.

“It is also an opportunity for African political and economic actors to aim for democratic consensus and adopt a common position in international negotiations.”

Facing climate change

Included in Agenda 2063, the protection of biodiversity, the conservation and sustainable management of natural resources, water security and renewable energies are critical strategic choices. Indeed, there can be no sustainable growth without inclusion, and this will be even more true in the years to come. The urgency of meeting the challenges posed by climate change calls for a two-pronged approach: mitigating the causes and adapting to the consequences. Hence the need to focus on development with the highest possible ecological value. This implies planning differently and implementing concrete adaptation measures, building resilience, reviewing our food systems, adopting green economies that are resilient to climate change, improving climate and weather monitoring. It is also an opportunity for African political and economic actors to aim for democratic consensus and adopt a common position in international negotiations.

Breaking down borders for the free movement of people

Unless there is a denial of the obvious, population displacements respond to a need for survival and security. Hindering this movement means running the risk of seeing poor populations trapped in a vicious circle of impoverishment and the most dynamic areas deprived of labour power. Rethinking our borders to allow free movement. We must work to make this possible and in the best possible conditions.

In this context, important steps have been taken on two of the key objectives of Agenda 2063: the creation of a continental free trade area, FTAA, and the creation of a Single African Air Transport Market (SAATM). Indeed, 80% of air traffic in Africa is still handled by foreign companies. A major objective of Agenda 2063, SAATM was launched on 28 January 2018 by the AU Commission. The liberalisation of market access between African States, the free exercise of traffic rights and the liberalisation of frequencies should contribute to the continent’s socio-economic integration and growth. As for the FTAA, which started in March 2018, once in force, it will be the largest trade zone in the world, theoretically expected to increase intra-African trade by 52% by 2022, eliminating customs duties on 90% of goods. Let’s free up our spaces on earth or in the air. This is a challenge.

We are now at a crossroads. We have never been so collectively aware of our material and immaterial resources, of our strengths, of our place to create in this uncertain world. Meanwhile, these uncertainties in the face of major demographic, climatic, political or economic changes are accelerating. At the dawn of this new decade, our responsibility as citizens is to ensure that the hopes of our young people and the dreams of the founding leaders are not in vain.

Why is the proper structuring of major infrastructure projects in Africa a priority?

Ibrahim Mayaki

Financing projects upstream, building partnerships between public and private operators,
 AUDA-NEPAD accelerates its efforts to advance the continent’s development. 

Since the Dakar Financing Summit in June 2014 and President Macky Sall’s push to advance high-impact projects across the continent, including those of integrated corridors with a regional dimension, ambitious national and transnational projects have been presented each year. According to the last figures released by the Infrastructure Consortium for Africa (ICA) in 2018, the level of Africa’s infrastructure commitments have exceeded US$ 100 billion, for the first time, a 24% increase compared to 2017. African governments were the main source of infrastructure financing, with US$ 37.5 billion dollars (37% of total commitments), followed by China, which committed 25.7 billion dollars (25% of total commitments). For its part, the private sector only contributed by US$ 11.8 billion (12% of total commitments). Given the high potential for significantly heifer private sector investment, our efforts must be concentrated in structuring infrastructure to meet investment requirements.

The time required to properly develop and structure infrastructure projects is long, in the best case usually between taking between three to seven years before reaching financial close. Moreover, according to an Okan / CEO Forum report, 83% of African Public-Private Partnerships are abandoned, not because of lack of funding, but because they are poorly designed or not commercially viable. Project development costs for large-scale PPP infrastructure projects can account for 5% to 10% of the total project investment.

To avoid this loss of time and money, AUDA-NEPAD and its partners have developed a series of tools to support the preparation and financing upstream of Africa’s regional and national infrastructure projects to enable more effective definition and structuring aligned with investor requirements. Related funding mechanisms are required to cover the costs of project development including project management, transactions advisory, technical studies (pre-feasibility, engineering, feasibility, socioeconomic development, environmental), business plans, financial models, among others.

The high level of technical challenges, from the complexity of the different environments to the the transnational nature of certain infrastructure projects – such as the 330 KV transmission project of Niort Core crossing four countries (Nigeria, Niger, Benin, Burkina Faso) – require a very high level of expertise and the mobilization of many international operators, therefore resulting in additional costs.

Thanks to specific technical assistance mechanisms, such as the SDM (Service Delivery Mechanism), the preparatory studies for the construction of the 1,000 km section between Abidjan and Lagos have mobilized joint financing of US $ 22.7 million from the AfDB and the European Union. A team of experts worked for 18 months during the preparatory phase in Lagos to enable the establishment of the Abidjan-Lagos corridor. This project has led, within ECOWAS, to the signing of a multilateral treaty between the Heads of State and Government of Benin, Côte d’Ivoire, Ghana, Nigeria and Togo, creating a supranational authority, the Abidjan-Lagos Corridor Management Authority (ALCoMA), a first in Africa. ALCoMA will facilitate the management and coordination of the entire project cycle, from preparation to construction, including operation and maintenance.

Following the same inclusive and integrative logical thinking, the LAPSSET megaproject in East Africa, estimated to cost in total US$ 25 billion, is an example of a significant government initiative aimed at establishing transnational partnerships between public and private institutions. Projects in development include Lamu Port in Kenya, a normal gauge railway line linking Juba to southern Sudan and Addis Ababa in Ethiopia, the development of a broad road network, two pipelines in southern Sudan and Ethiopia, an oil refinery in Bargoni, Kenya, three airports, among other projects. This ambitious series of projects involve a cross-section of national and international investors, both debt and equity.

In order to facilitate and deepen the  public-private dialogues required to remove one of the main obstacles to infrastructure development on the continent — the lack of consideration of private sector constraints in the implementation of major projects — the Continental Business Network (CBN) was launched on the sidelines of the World Economic Forum in Cape Town, South Africa, in June 2015. Private sector leaders are systemically invited to share their advice and capacity in order to advance the critical infrastructure projects being advised by AUDA-NEPAD.

It is crucial that we work actively to fill our infrastructure gaps – by addressing the broader issue of integrated approaches to infrastructure development while building partnerships with key stakeholders: the private sector, institutional investors, African governments and willing development partners.

We need to engage together across the public and private sectors in collaborative frameworks to further the development of initiatives such as the 5% Agenda to mobilize funding from African pension funds and the Africa Infrastructure Guarantee Facility to scale guarantees, creating the enabling environments required to attract more private capital to Africa’s infrastructure.

My message at the conference “Rethinking Development in Africa” at Columbia University | SIPA

Ibrahim Mayaki

On 27 September 2019, I had the opportunity to share my opinion and vision on the key issues that will drive the debate on Africa’s development during a conference organized by Columbia University School of International and Public Affairs under the theme: “Rethinking Development in Africa“.

I address covered the following areas: Africa’s transitions versus policies; governance versus policies; global uncertainties versus Africa’s uncertainties, and; reflections on rethinking development.

It is not prudent to continue to view ‘development’ in traditional paradigms, considering that ‘development’ itself requires new thinking in order for real transformation to take place, given the present conditions.

In fact, the critical transitions that are taking place on the continent include demographic, technological, natural systems, climate change, governance systems as well as human development transitions. None of these transitions can be dealt with independently, and moreover, the transitions make it difficult for youths in the development space, who already predominantly have a negative perception on the delivery of policymakers. Therefore, policymakers need to understand these transitions fully and prepare adequately.

Power relations have changed fundamentally, meaning governance systems are inadequate, which cannot be changed in a top down manner. Therefore, the inadequacy of governance systems makes power irrelevant, as it has been shown recently in several countries on the continent.  There is therefore a shift in power from centralised power to more local governance systems and local communities.

Furthermore, governance could strengthen its credibility with renewed and innovative forms of governance as is the case of a country such as Botswana, which has inclusivity as a strong trait in its governance system. Inclusivity is therefore an absolute and essential component in rethinking development unlike was the case years ago.

With regards global uncertainties and Africa’s uncertainties, it was observed that aid, which was a strong component in Africa’s development agendas, is now disappearing, with the role of the multilateral system being questioned. In addition, an agenda on global sustainable development that must be applied by all countries shows that Africa is lagging behind.

However, Africa is now looking at its own regional and internal markets through the African Continental Free Trade Area, meaning that even at the current time of global uncertainty, a great opportunity for Africa exists. The fragmentation of African countries necessitates that the continent implements regional solutions for national challenges, and the strengthening of regional and internal markets to restore credibility of national governments.

Some of Africa’s uncertainties include the fact that in the next eight years or so, most of the incumbent African presidents will no longer be here, paving the way for new leaders who will emerge out of democratic processes. Therefore, the youth will have a stronger role to play in the continent’s new political administrations. However, the uncertainty is whether the new leaders will emerge through sound democratic foundations or through populist solutions, or even whether they will emerge out of an increased level of conflicting scenarios.

In conclusion, I reflected on rethinking development, stating that the best way to include youths in Africa’s development framework, Agenda 2063, is to let them be a part of its design and implementation.

A change of paradigm is there needed in the co-production of public policies. Africa will need to reinvent its governance systems with the empowering of local communities and implementation of regional solutions. In addition, the way people identify with development policy, is the extent to which they feel that their dignity is being upheld. Moreover, rethinking development also means rethinking justice systems.

Belinda Archibong, Assistant Professor of Economics at Columbia University, a discussant at the address, commented that Africa does not really need to develop on aid, but more on trade. She also noted that another critical area is in the closure of the youth participation gap in governance systems.

Akbar Noman, Adjunct Associate Professor of International and Public Affairs at Columbia University, also a discussant said, “The importance of the transitions highlighted by Dr Mayaki, especially the one on demographics, projecting what will be needed in the labour force and its nexus with climate change, is important in answering the question on the generation of employment.”

Here you will find the full video of the « Rethinking Development in Africa » conference at Columbia University | SIPA on Friday, September 27 in New York 

Global warming is at the core of the African Union Development Agency’s priorities

Ibrahim Mayaki

AUDA-NEPAD integrates the fight against global warming into a global perspective of the continent’s economic development.

The latest United Nations Climate Summit highlighted the differences in approach between polluting countries, major industrial powers and countries suffering the consequences, particularly those in Africa. AUDA-NEPAD, in its DNA, has this environmental dimension.

Since its creation, we have constantly integrated into each of our programs, the sustainability and protection of our biodiversity. Since October 2001, with the launch of the Environment Initiative, mechanisms have been put in place to combat global warming, such as combating land degradation, wetland conservation, the sustainable conservation and use of marine and coastal resources, and the cross-border conservation and management of natural resources.

AUDA-NEPAD is committed to the implementation of Agenda 2063, which sets out a common continental strategic framework to promote inclusive growth and support sustainable development. We will not wait 50 years to act. The first deadline is therefore 2023.

“This illustration of the objectives to be achieved by 2023 shows the African Union’s commitment to building environmentally sustainable and climate-resilient economies and communities, as called for in Goal 7 of Agenda 2063.”

The protection of biodiversity, the conservation and sustainable management of natural resources, water security and renewable energies: for each of these challenges, strong proposals have been adopted, enabling States to draw up a clear and quantified roadmap. In concrete terms, by 2023, the proportion of land used in an eco-sustainable manner must reach at least 30% of the total. Transboundary natural resources will now have to be integrated as natural capital in the negotiations. Water security requires better management of rainwater and irrigation, including the promotion of the use of recycled wastewater for agricultural or industrial purposes. In addition, we will support all actions to reduce the share of fossil fuels in total energy production to minus 20% and to increase the share of renewable energies in total energy production by at least 10%.

This illustration of the objectives to be achieved by 2023 shows the African Union’s commitment to building environmentally sustainable and climate-resilient economies and communities, as called for in Goal 7 of Agenda 2063.

To support these initiatives, all public and private funding mechanisms will be involved. At the national level, between 75% and 90% of the financing of Agenda 2063 will be done through the mobilisation of domestic resources. At the continental level, the African Development Bank has already announced a doubling of its financial commitments for climate action, bringing its contribution to $25 billion between 2020 and 2025.

Spending on climate change adaptation measures is not a sunk cost. According to the latest report of the United Nations World Commission on Adaptation, investing $1.8 billion in these measures could generate $7.1 billion in benefits between 2020 and 2030. The United Nations thus confirms that the antagonism between economic development and the fight against global warming is no longer economically justified.

In this regard, the African Union Development Agency continues its efforts by continuing to innovate in strategic growth-generating sectors while meeting its responsibilities in addressing the global challenges of mitigating the effects of global warming and adapting to these changes.

Q&A: The African Union’s first ever Development Agency

Ibrahim Mayaki

Question: Please take us through the journey that the led to the creation of the African Union Development Agency-NEPAD.

Dr Ibrahim Mayaki: The African Union Assembly of July 2018 approved the establishment of AUDA-NEPAD as the technical executive agency and development anchor of the continent with its distinct legal identity and defined by its own statute, to deliver on the development priorities articulated by the African Union. Its establishment is part of the overall institutional reforms of the African Union. 

At the 31st Ordinary Session of the Assembly of African Union Heads of State and Government in Nouakchott, Mauritania, a decision was officially adopted to transform the NEPAD Planning and Coordination Agency into the African Union Development Agency (AUDA-NEPAD).

The vision of AUDA-NEPAD is to ‘Harness knowledge to deliver the Africa we want.’ The mission of the organisation is to provide a platform for African countries in order to ensure the effective and integrated planning, coordination and implementation of programmes and projects aimed economic integration and development, and embracing of AUDA-NEPAD’s principles and values.

Read the full article here.

Positive discrimination in favour of major African companies is needed

Ibrahim Mayaki

What concrete changes will result from the transformation of the New Partnership for Africa’s Development into an AUDA?

The agency has autonomy of execution and freedom to mobilise resources, for example, with advisory services to states and regional organisations. Thus, the African Union Commission is delegated certain tasks of implementing development policy and will be able to focus on political orientation, governance, peace, security [and so on].

Read the full interview on Africa report website.

Diaspora remittances are a key source of financing for Africa’s development

Ibrahim Mayaki

Whether formal or informal, remittances from the diaspora have long been undervalued. However, they characterize a large part of Africa’s financial life. These financial flows between individuals contribute significantly to the economic growth of African countries: between 10% and 20% of the GDP of some countries, from Senegal to Lesotho, thanks to remittances that are sent through formal channels. According to the World Bank, money transfers to Sub-Saharan Africa represent $46 billion for the continent as a whole in 2018. These transfers have become more important than official development assistance.

Donors have been slow to realize the importance of remittances. The first report was published only in 2010 by the World Bank and the AfDB. It estimated that some 30 million African nationals from the diaspora, including North Africa, made “formal” transfers through traditional banking networks. 

Another category of less documented flow, that is crucial in daily life, is the funds that flow between African countries, such as Nigerian operators who source agricultural inputs in Côte d’Ivoire, Somali expatriates who support their families from South Africa or Malian manufacturers who source cement in Senegal, for example. These exchanges do not necessarily involve direct transfers. They are based above all on a form of “relational” economy specific to our continent and is based on trust. (see below the main amounts of remittances in Africa).

We can also note that a significant proportion of money transfers are made through informal means. In reality, this money circulates through ingenious channels, aimed at circumventing exchange control regulations or fees charged on international transfers. A simple call between New York and Dakar is all it takes, through banks managed by the “Modou-Modou”, small traders belonging to the Muslim community of the Mourides. These dematerialized money transfers are based on trusted networks and intermediaries charging small commissions: for example, an informal operator in Morocco will take the money of a Senegalese in Morocco who would like to transfer it home, but keep the cash for a different transaction made by another Senegalese customer in Morocco. 

Commissions are half the amount of the 10% or so charged by some remittance companies that are deeply involved in Africa and are located in every cities from which migrants leave, such as Louga in Senegal or Kayes in Mali. The market is huge, since 80% of African migration takes place within the continent, according to the African Union.

These agencies share a rapidly expanding sector, with 61% of the market share of a $4 billion per year market according to the World Bank. This is a trend coveted by banks (32% market share), post offices (5%) and, increasingly, by mobile phone operators. Some operators, particularly in Kenya, have changed the situation, such as the M-Pesa electronic wallet. This approach has been adopted across the continent.

Two countries are leading by example. Ethiopia launched in 2002, a website, the Ethiopian Diaspora Directorate, which identifies investment opportunities in the country for the diaspora members. They are very involved in their home countries, the Ethiopian diaspora the Ethiopian diaspora has invested more than $56 million in the project to build one of Africa’s largest hydroelectric dams, the Great Renaissance. Rwanda launched the Agaciro sovereign solidarity fund in 2012, which has raised €51.5 million in four years.

In fact, African financial success stories are countless. The Dahabshiil remittance network, founded in 1970 in Dubai by Somali businessman Abdirashid Duale, has grown to the size of a multinational… It has more than 2,000 employees in 144 countries. They have the advantage of receiving declared salaries, with pay slips. A good way out of the informal sector, while taking advantage of the huge contribution of migrants, whether on the continent or elsewhere.

 

 

 

 

 

 

 

 

 

Source : The Global Knowledge Partnership on Migration and Development, 2019