Donations From Africans Abroad Outpace Aid

Payments sent to family back on the continent beat traditional foreign aid payments by nearly $10 billion.

Posted: 04/17/2013 10:30 AM EDT

Although African nations are often seen as totally dependent on aid payments from foreign donor countries and institutions, a new study sheds light on a not-so surprising source of money that’s flowing into Africa at a rate higher than aid payments: Africans living abroad.

According to data compiled by Hong Kong-based Ghanaian academic Adams Bodomo, payments from Africans living abroad sent to family back on the continent beat traditional foreign aid payments by nearly $10 billion. BBC reports:  

“In 2010 — the most recent year for which meaningful comparisons can be made, according to Mr Bodomo — the African diaspora remitted $51.8bn (£34bn) to the continent.

In the same year, according to World Bank figures, ODA to Africa was $43bn (£28bn).

"I started the research to see if I could support a hunch I had that money remitted by African families was more efficient aid than ODA money," the Ghanaian professor told the BBC. "I found it was clearly more efficient and better targeted but to my surprise I found it was also a much bigger sum."


Mr Bodomo argues there are lessons for African governments too. If "family aid" is more efficient, he says, it should be encouraged.

"About 12% of diaspora money sent home through formal financial channels is swallowed up by bank fees. Governments should find ways to reduce this so more funds get to people who need them."

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(Photo: LaCoppola-Meier/Getty Images)

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