Members of the Rwandan Diaspora have started an investment fund expected to be used as a vehicle to drive Diaspora and national development ventures.
The investment fund, with an initial capital of Rwf500 million, was last month registered at the Rwanda Development Board (RDB) by members of the Diaspora.
According to Dr Egide Karuranga, Associate professor of International Business and Human Resource management at Laval University, Canada, who was elected as manager of the Global Diaspora Investment Fund (GDIF), the initial capital will be raised in installments during the first year.
The fund, he said, is a private company linked to the Rwanda Diaspora Global Network (RDGN).
He described the move as “the smartest way of being actively operational” in the country.
“ The RDGN will carry on with its normal philanthropy activities such as the One Dollar Campaign (ODC) but GDIF will carry out the for-profit ventures,” Karuranga said.
During the recently concluded 12th National Dialogue, or Umushyikirano, the Diaspora was represented by 200 members.
Last month, the RDGN elected a new executive committee with US based Alice Cyusa as president.
Today, those still in the country are expected to launch a platform for skills and knowledge exchange.
At a meeting in Kigali, they will discuss issues regarding value chain optimisation, human resource management, customer care, among others, which can help enhance productivity in many sectors such as agriculture.
In a paper: “African Diaspora remittances are better than foreign aid,” Dr Adams Bodomo, Professor of African Studies at the University of Vienna, Austria, says beyond money transfers to family members, there are many other ways Africa’s Diaspora could help with African development, including the provision of their expertise, experiences and technical know-how.
Dr Karuranga agrees with the Ghanaian academic.
“We have been requesting that whenever Diaspora Rwandans come home, it is a good opportunity to update them about the country’s development but it would also be important to tap their expertise and use it to develop the country,” Karuranga said.
“We have a wide range of expertise which can help develop the country in different ways. For instance we have many Rwandan professors in Canada’s top 10 research universities. They are willing to help enhance higher education back home,” he added.
Remittance mobilisation strategy
Meanwhile, the Ministry of Finance and Economic Planning has placed adverts in the press searching for an international individual consultant with a view to develop the country’s remittance mobilisation and coordination strategy.
The ministry reckons that with increasing government outreach programmes to the Diaspora through events such as Rwanda Day, coupled with a conducive environment for doing business, the country’s Diaspora community should be able to increasingly remit more funds back home which could catalyse further national development.
The consultant will, among others, assess the current remittance volumes, structure and source and develop a strategy to better coordinate and attract more remittances.
They will also detail techniques that the government could use to marshal and attract more remittances particularly targeting investments that help boost the economy; in addition to highlighting aspects that previously facilitated the upward trajectory of remittances from $25 million to $175 million in 2012, according to the ministry.
The National Bank of Rwanda’s annual report for the July 2012–June 2013 financial year indicated that net remittances from the Diaspora were $65.07 million in 2010, $110.18 million in 2011, $118.25 million in 2012, and $114.67 million in 2012/2013.
Dr Bodomo argues that no one really knows the exact amount of remittances Africans send back home, particularly since not all of these go through official banking and remittance channels, but the figure is believed to have gradually increased over the years.
World-wide remittances to developing countries were $351 billion in 2011, far exceeding global official development aid, standing at $129 billion, according to the World Bank.
Remittances Vs aid
The greatest advantage that foreign remittance funding has over foreign aid funding is that these remittance funds go directly to the remittance targets, the recipients, most of the time.
“There have been cases in which family remittances have been wasted or misappropriated. But this is nothing compared to the legendary inefficiencies in the foreign aid industry,” Prof. Bodomo says.
Another advantage of remittances, according to the African academic, is that they are devoid of ties – such as the need for structural adjustment programmes, public-sector deregulation, privatisation and even demands for overhaul of the country’s political system before further funds can be disbursed – for the most part.
Bodomo urges governments to take substantial actions for outlining robust policies and their implementation toward attracting African Diaspora remittances over and above foreign aid.
Apart from employing a ‘Diaspora bond’ – a kind of debt security issued to Diaspora Africans to enable government to tap into their assets – Bodomo advises governments to also involve the Diaspora more in the political system of their countries toward improving good governance as another way to draw more remittance funds.