How region’s Diaspora community can spur the manufacturing sector

The East African Diaspora community can add great value to human and financial capital needed as the region embarks on a bold transformation agenda and seeks to end dependence on commodity exports by seeking for innovative ways to move forward in developing value chains.
Uwitonze speaks during the summit yesterday. (Timothy Kisambira)
Uwitonze speaks during the summit yesterday. (Timothy Kisambira)

The East African Diaspora community can add great value to human and financial capital needed as the region embarks on a bold transformation agenda and seeks to end dependence on commodity exports by seeking for innovative ways to move forward in developing value chains.

This was said by Marie Chantal Uwitonze, the president of the African Diaspora Network in Europe (ADNE), who was speaking during the East African Manufacturing and Business Summit that closed in Kigali yesterday.


Uwitonze, a Rwandan living in Belgium, was addressing the topic of long-term and innovative financing for the manufacturing sector and the participation of the diaspora.


“Harnessing manufacturing is the best way to achieving inclusive 2030 Agenda for Sustainable Development in Africa,” Uwitonze said.


“Africa has an enormous potential for industrialisation. With our minerals, hydrocarbon and water resources, a climate that is favourable to agriculture and young and dynamic population from inside and outside the continent, Africa can successfully become a competitive power.”

Uwitonze said industrialisation has a multiplier effect on economic growth, job creation and interconnection of markets, among other benefits.

“Regional integration benefits every citizen of East Africa and we, as the Diaspora, are ready to pull our weight in this promising step. We are ready to bring home our skills, knowledge and capital. We live out of the continent but our hearts live in Africa,” she said.

There are nearly 150 million Africans living in Diaspora.

Remittances as assets

Robert Mathu, the executive director of the Capital Markets Authority, noted that remittances to regional countries have become a very significant asset to the region and have been increasing consistently.

In 2015, he said, Kenya, Rwanda, Tanzania and Uganda fetched a combined $3.5 billion and in Kenya alone, remittances superseded the traditional export proceeds from coffee, tea and others.

Dr Shem Ochuodho, global chairperson of the Kenya Diaspora Alliance, said the Diaspora will be a game changer for the region’s economic growth and development if well harnessed.

Ochuodho said some members of the Diaspora think that all their governments back home care about is their remittances and yet if this perception is changed, the Diaspora can contribute more to their countries. Africa’s Diaspora remits between $60 and $80 billion annually, the better part of which goes to Nigeria.

According to Uwitonze, Diaspora remittances account for more than three times the official development aid.

Leveraging Diaspora remittances as source of financing for manufacturing, she said, requires assessing their effectiveness and drawing lessons from past experiences.

She said it is not easy to measure the impact of remittances as they largely remain essentially family-to-family assistance and, it is, therefore, important to envisage different mechanisms to link them to national projects.

Regional governments and financial institutions have an important role to play in this process, she said, pointing to well-thought out Diaspora bonds – debt instruments issued by a country or a private corporation to raise financing from the Diaspora – as one sure way of making it happen.

“Diaspora bonds are one of the tools to securitise remittances. Diaspora bonds can provide additional funds for the manufacturing projects. They are a relevant alternative to borrowing on the international capital market, multilateral or bilateral financial institutions.”

Diaspora bonds, she recalled, helped countries such as Israel and India which are “successful examples” to face economic crisis. In Africa, Ethiopia and Nigeria issued bonds that triggered less performance but these “can provide good cases of experimentation,” Uwitonze said.

Conditions for a Diaspora bond

To leverage the potential of Diaspora bonds, Uwitonze, like Ochuodho, recommends a good relationship between countries and their Diaspora communities.

She said: “There is a need for permanent dialogue between the countries and their Diaspora. A similar relationship should be initiated at regional and continental level. The Diaspora need to be informed about the strategies and policy orientations.”

Behind the idea of Diaspora remittances, Uwitonze reasoned, there is the sense of patriotism, and the belief that one is doing good and is contributing to development of their country.

“The sense of patriotism comes from the strong ties between the country and its Diaspora. For instance, since the introduction of the ‘Rwanda Day’ and Umushyikirano annual meetings that involve the Rwandan government, including the President and the Diaspora strengthened the spirit of patriotism within the Rwandan Diaspora.”

Good knowledge of the target Diaspora population and awareness about the bond exists is also crucial.

Before launching the bonds, Uwitonze said, countries should know about the potentiality in their Diaspora: the profile of potential investors, the sectors that interest them, the average amount they are ready to invest, among others.

Financial stability and security guarantees will also be important in the regional effort to leverage the potential of Diaspora bonds.

“The securitisation of remittances can reinforce the trust of the Diaspora while providing African banks with a tool to raise additional resources,” she said.

Eng. Daniel Murenzi, president of the Rwanda Diaspora Global Network (RDGN), said Rwanda’s Diaspora is playing a significant role in the country’s socio-economic development and this has mainly hinged on efforts to construct cohesion.

Murenzi said the Government advocates for the interest and rights of Rwandans abroad in their host countries and in Rwanda and mobilises them for sustained image building of their nation.

“Recent years have witnessed a renewed interest in the complex relationship between communities living abroad and development, mainly due to continued mobilisation. We are experiencing a continuous growth in remittances,” Murenzi said.

In 2011, he indicated, $166.16 million was received from the Diaspora through banking institutions – without counting amounts coming in through informal channels – while in 2016, $167.33 came into the country.

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