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African business, politics and lifestyle

October 10th, 2008

Will global crisis hurt remittances to Africa?

Posted by: Jack Kimball

Employee counts money at foreign currency exchange in TokyoIt seems everyone in Africa has family members living abroad.

Just stop someone on the street and ask if they have a cousin, a brother, or a sister living in Europe, the United States or elsewhere around Africa, and most likely they’ll say that they have two or three or more. Remittances from those loved ones total some $40 billion per year, according to the United Nations. In some countries, diaspora money makes up more than 20 percent of the gross domestic product, and analysts say, remittance cash may be as much as 50 percent higher than current estimates due to informal transfers.

But there is growing concern that this money could be a victim of a spiralling crisis in global financial markets.

It’s still too early to tell how much remittances from the estimated 30 million Africans living abroad have been impacted by the crisis, which, world financial bodies warn, could lead to a global slowdown. But some families have already been told to expect less money.

This year, the continent has suffered a dual attack from high oil and commodity prices. And now, if there is a shortfall in remittances, a third front would put an added strain on wallets and purses. But in some ways, Africa is better-placed to weather some of the storm because its banking sector is relatively unexposed and its economic ties with Asia are deepening. For remittances, the fear is that if a recession hits Europe or the United States, traditionally resilient flows could ebb as migrants’ purse strings are pulled tighter and tighter.

Will a slowing of global economies hit remittance money from Africa’s large diaspora? Or, will Africans abroad prove resilient yet again and continue to send the same amount of money to families back home?

August 18th, 2008

Back to Africa?

Posted by: Matthew Tostevin

Members of Sierra Leone's U15 football team FC Johansen pose for a team photo in Freetown

Earlier this month, players in a Sierra Leonean football team were hailed as heroes when they returned from Sweden - because they all came home.

In the past, they might have been more likely to scarper and seek asylum while they had the chance.

It was a quirky tale, but one that leads to a serious question: are people starting to see more opportunities in Africa?

Nigerian entrepreneur returnee, Kayode Akindele, 28, in his Lagos office August 1, 2008.

It’s a subject Reuters correspondents have been exploring from around the continent: Nick Tattersall wrote about ambitious Nigerians heading home, Hussein Ali Nur and Guled Mohamed told the story of the university founded by returnees to Somaliland. In London, Luke Baker met Zimbabweans keen to return if there is an end to the economic catastrophe that now marks it out as an exception in the region rather than the norm.

Undoubtedly there are huge numbers of people still trying to flee Africa for better lives elsewhere - just witness the overcrowded boats struggling to Europe.

African would-be immigrants arrive on a boat in Birzebbugia in the south of Malta

But there is optimism in some quarters too. It was interesting to see “Buy into Africa” as the headline in the Investors Chronicle this week.

As growth slows in Western countries and African economies enjoy their fastest growth in years, might the balance of those leaving Africa and those returning home be starting to shift?