Ghana, others can raise over $5b yearly from diaspora bonds – Economist
Ghana and other countries in sub-Sahara Africa are said to have the potential of raising between $5 billion to $10 billion from bonds in the diaspora.
Lead economist at the World Bank Dilip Ratha says countries in the sub-region including Ghana can issue bonds in high-income countries in the diaspora where it has a lot of its nationals and this can reap a lot of money in billions of dollar in a year.
Ratha was cited in a World Bank statement as saying: “Sub-Saharan African countries can potentially raise $5–$10 billion a year in diaspora bonds. Countries with large diasporas in high-income countries that can potentially issue diaspora bonds include Ghana, Ethiopia, Kenya, Liberia, Nigeria, Senegal, Uganda, and Zambia.”
The statement was issued in Washington on March 30, 2011 on a report which was conducted by the Bank and the African Development Bank (AfDB) titled “Leveraging Migration for Africa: Remittances, Skills, and Investments.”
“African governments need to strengthen ties between diasporas and home countries, protect migrants, and expand competition in remittance markets otherwise, the potential of migration for Africa remains largely untapped,” Ratha, who is also the main author of the report added.
Mthuli Ncube, Chief Economist of the AfDB also said African banks can improve their access to international capital markets by issuing bonds that are securitized by future remittance inflows.
“The African Development Bank, the World Bank and bilateral donors can play a significant role in facilitating remittance securitization and mitigating the risks to African countries of issuing these remittance-backed bonds”, Ncube said
According to Ncube, efforts can include technical assistance in project design and creditworthiness analysis, prudential debt management, and helping African countries obtain sovereign ratings.
By Ekow Quandzie
The WB study is correct come to think that Western Union,Vigo and
Moneygram control the remittance market instead of traditional banks. The same 3 companies generate combine $10Bn annually in Diaspora remittance. Conservatiove figures of Africans in US is 2M
and the remittance cushion respective countries against economic bankruptcy;fuelling Ghana with $2Bn annually is enough to revitalized economy,create jobs and build domestic savings. The incompetence of African regimes with primary focus on “LOANS” to feed corruption make this proposal an alien fiscal goal. The borrow,
waste and spend culture is more convenientto sustain neo-colonialism.