Emigration from Africa will change the world

And here is how African governments can benefit from it.

Author

Joe Kinvi
May 18, 2025

In April, The Economist published an article that showed how emigration would change the world. In summary, the point of the article is that emigration will benefit both the world and Africa. It will help the rest of the world by filling the current critical talent gap. In Africa, where there is a chronic shortage of jobs, emigration will help alleviate employment pressure across the continent. For context, for every 15 million qualified talent that enters the workforce every year, only 3 million jobs are created, or 20%. The article addressed the negative side of emigration, primarily brain drain, but failed to address how it will contribute to the continent’s prosperity. 

In short, I believe the GDP of Africa will grow significantly if African governments can effectively channel the capital generated through emigration. The Economist article already touched on this, although very loosely. Here is an extract from the article. 

‘Steven Nuwuguba was in his early 20s when he went to Qatar. He toiled seven days a week at the main airport and was hectored by racist bosses. He does not want his children to go there. But he made twice as much in a month as Uganda’s GDP per person. That enabled him to start a business when he came back. “$2,000 in our country, it’s a lot of money,” he says. Maids make much less but can return with enough to start a business or begin building a house.’ 

Steven and many people who work abroad have no intention of staying abroad. They WANT to go back home. Many people get stuck abroad for various reasons, but most want to return for a better life. The biggest barrier for many Africans is a lack of capital, and they are willing to travel abroad for a couple of years, save, and then return to live the desired life. 

Those who want to build a house start doing it as soon as they get abroad. Put a deposit on a piece of land. Pay for it over a couple of years. Do the same for building the house over a couple of years. This presents a lot of capital leakage and is very expensive in the long run. A lot of these investments are not tracked. They are bundled as remittances. We need to start decoupling remittance into two parts: consumption remittance and investment remittance. As part of my research, approximately 25% of all total remittances in 2023, totalling around $24 billion, are already allocated towards investments each year, presenting a significant opportunity for African governments. 

In addition, beyond investing, African emigrants are sitting on substantial savings. The UN estimates that it has $30 billion in idle funds. I think it’s more. Probably 2x or 3x. African governments can leverage this capital to help grow their countries’ GDP. 

To do so, they must spend more time understanding how many of these emigrants think. 

First, they don’t trust their governments, as the article addressed. In fairness, they have no reason to. The reason why they left in the first place is that the government has failed them. Many Africans are sceptical that states that have squandered their natural resources can do better with their human ones.

Second and more importantly, the emigrants are finally making money and don’t want to lose that money. The money is new and for a particular purpose, and losing any of this capital means they are farther from their goal of returning home. They are also not ready to invest this capital with any African government because of default, FX risks, and the aforementioned reasons.

On the other hand, governments across Africa are issuing bonds and lots of instruments that completely ignore the needs of the diaspora. They are trying to raise adequate capital for many projects, and I think now is the time to start looking at the African immigrant community seriously. 

African governments must start building bespoke investment products catering to this growing demography. The data already shows that many emigrants do proportionally better when they move abroad and have access to capital to invest. A low-hanging fruit is a foreign currency-denominated instrument that pays returns in local currency on a short-term interval. These returns could be used for consumption remittance, because African emigrants have to take care of their families anyway. This is a win-win. As a result:

  • Governments can curate unique instruments that cater to the diaspora.

  • Emigrants can earn higher returns and use these returns for remittance.

  • Returns paid will stay in the country because emigrants use them for remittance. 

  • Bingo! 

Governments can also partner with real estate developers to enable the Diaspora to easily invest in real estate without friction. The good news with these investments is that most, if not all, of these returns will be reinvested locally, unlike taking loans from external private markets. 

These are just some examples of how African governments can benefit from emigration by leveraging capital available from emigrants to boost their GDP. 

Thank you for reading. 

In case you are wondering why I wrote this article, I’m building Borderless, the infrastructure that enables the Africa Diaspora to invest at home easily. We are starting with building tools for investment collectives. Our medium-term goal is to collaborate with African governments and create instruments enabling the African Diaspora to invest at home easily. We will go live soon, and you can join our waitlist here.

I have been doing a lot of press, and my recent interview was with Chimoney. I encourage you to watch it as it details African fintech, investments and how Borderless works. Please check it out below, and if you enjoy watching it, kindly share it with someone you think would enjoy listening.

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