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Migrant remittances, namely the money migrants send to their countries of origin from their host countries, are increasingly significant for West Africa. In 2014, the amount sent home totalled US $26 billion (of which US $20.9 billion was sent to Nigeria) and amounted to 3.2% of the region’s GDP. The magnitude of these transfers, which make West Africa the second recipient sub-region on the continent, reflects the size of the West African diaspora, estimated at 9.1 million people in 2011, or 2.6% of the population of the region.
As recently highlighted in the 7th edition of the West Africa Monitor Quarterly these financial flows are an opportunity for regional development. Since 2006, the annual volume of migrant remittances exceeds that of official development assistance (ODA) received by the 15 countries of West Africa. Certainly migrant remittances and ODA are different funds in terms of destination and purpose. Remittances mainly serve to increase household consumption, and are not structured as development projects. Still, an analysis of recent developments reveals that their impact improves living conditions for receiving families. Additionally, migrants develop strong skills abroad that help them create new forms of engagement in their countries of origin.
Several trends point to the growing involvement of diasporas in the development of West Africa. First, the financial volume of remittances sent to countries of origin continues to grow. Such growth is especially intense when families encounter emergency situations, such as in Sierra Leone, where remittances increased by over 50% between 2013 and 2014 with the Ebola virus disease outbreak. Secondly usage of these resources are spreading the money beyond the migrant family nucleus – for example it is often devoted to building houses – producing spillover effects on trade and related industries.
Through their countercyclical effects and their impact on the local economy, these flows consolidate and stimulate development at the microeconomic level, that is, at the level of families and villages. Migrants, however, are also involved at other levels. For example, they are increasingly turning towards international investment, through, for example, diaspora bond issues. These sovereign bonds, aimed at members of the diaspora who wish to contribute to the development of their home countries, are set up by governments to finance major projects. In 2008, Ghana, for example, launched an operation called "Golden Jubilee Savings Bond" to finance infrastructure projects in each region of the country. Designed for Ghanaians, including those in the diaspora, the operation has allowed the state to raise nearly US $50 million.
Meanwhile, social transfers, though less tangible than financial flows, contribute to regional development. A growing number of North-South development projects are implemented by highly skilled migrants and lead to a transfer of skills. In Nigeria for example, Nigeria Diaspora Association Diagnostic and Trauma Foundation organizes an annual conference on health challenges, led by Nigerian professionals working in the United States. There is a plethora of similar initiatives in most West African countries. In addition, members of the diaspora increasingly influence the political life of their countries of origin, demonstrated at the highest level by Lionel Zinsou, elected Prime Minister of Benin in June 2015.
West African countries are aware of the key role to be played by their nationals who reside abroad. And the majority seek to make homecoming attractive, through the granting of dual nationality, a political voice, and implementation of social and economic incentives. However, several obstacles still prevent the full utilization of the contributions of the diaspora, including the high cost of money transfers from abroad, the large share of informal shipments, and the sporadic nature of transfers. These barriers result in financial leakage and dispersion of resources, which make it challenging to channel such flows into investment and projects.
A variety of regulatory and financial tools are used in Africa and worldwide, such as diaspora bonds, bibancarisation, and mobile financial services, which can help with the problems described above, thereby facilitating the flow of remittances and optimizing their contribution to national and regional development. West African governments must in turn encourage migrants to invest more in social or economic projects. The diaspora is by definition an external population, but it must also be considered an internal source of wealth.