On 12 April 2022, we hosted a government roundtable for African partner countries, in cooperation with the African Union Citizens and Diaspora Directorate, to delve into the potential for diaspora engagement to stimulate and support youth entrepreneurship in the region.

The government roundtable, attended by eighteen different countries, follows on from the public webinar held in May 2021 at which we took a 360 view of mentoring within entrepreneurship, dissecting initiatives for, from and within the diaspora. 

As the continent with the youngest population in the world, African governments recognise the importance of involving the youth for sustainable growth. The larger framework set out by the African Union (AU) to ensure youth involvement in public policy-making and development processes includes the African Youth Charter and African Plan of Action for Youth Empowerment 2019-2023. Concurrently, diaspora engagement is thriving in the region and takes place in myriad forms. On 12 April, we narrowed the focus from the public webinar to discuss existing government practices that leverage diaspora support to young people in Africa through entrepreneurship. 

Four main areas of interest emerged…

Diaspora funds for youth entrepreneurship and employment 

Agenda 2063 refers to youth as the driving force behind its political, social, cultural and economic transformation. One solution to youth unemployment and underemployment, which are major challenges faced by African countries, is youth entrepreneurship.

A major obstacle young people face is a lack of financial capital to launch businesses. In response, governments are now looking at ways to encourage their diaspora to invest in entrepreneurial projects. Directing diaspora financial capital, including remittances, to such productive channels not only provides a necessary boost for young entrepreneurs, but also increases the value of financial contributions by avoiding fees related to traditional fund transfers.

Senegal in the spotlight

One mechanism incentivising diaspora investment in youth projects resulting in job creation is the Fund in Support of the Investment of Senegalese Abroad (FAISE). Senegal created FAISE to provide technical and financial assistance to diaspora-led development projects. For an initiative to benefit from financing, one of the eligibility criteria looks at the total number of local employment opportunities created, especially for youth and women. 

Meanwhile, the General Delegation for Rapid Entrepreneurship of Women and Youth manages a diaspora fund totaling 3 billion CFA francs to assist aspiring young diaspora project leaders. It also runs a participative financing scheme to channel and supplement diaspora investments in financing local businesses.

Entrepreneurial knowledge and experience transfer

Aside from financial investments, diaspora could further catalyse youth entrepreneurship through technical assistance. As discussed during our previous Africa regional thematic meeting, various diaspora mentorship programmes have proved the benefits of knowledge and experience transfer through mentoring. Here, diaspora can be either at the giving end, actively transferring knowledge and expertise to entrepreneurs from either or both the country of heritage and diaspora. Or they can be at the receiving end, as beneficiaries, so as to enhance their contributions to development in another manner, as business owners themselves for example.

Moving towards a more horizontal model of learning, Cameroon’s Club Dias’Invest initiated a peer-learning community of  diaspora entrepreneurs, investors, and project leaders. Complementing the government’s entrepreneurship accelerator and accompaniment programme, Dias’Invest 237, this initiative serves as a platform allowing diaspora to support each other and collectively develop solutions. Members benefit from an initial capacity and needs assessment which serves as the basis for personalised coaching. Training and information sessions are also frequently organised on topics such as business plan design, management methodologies, and grant application writing. 

Numerous countries in Africa  have also implemented – or are in the process of setting up – government-funded accompaniment and mentoring programmes for diaspora project leaders in general. However, it is crucial to underline the need for initiatives specifically crafted for and allocated to the youth. 

Co-creating an enabling and engaging entrepreneurial environment 

Lastly, diaspora support youth entrepreneurship by helping them forge connections, creating space for them in the ecosystem, and setting a conducive environment for their involvement and growth. With their accumulated expertise, experience, and networks, diaspora individuals can be an invaluable resource for young people wanting to start out in a particular industry. In addition, increasing the visibility of diaspora involvement could eventually lead to more interest from foreign investors in a particular market, through the Network Effect..

Acknowledging the importance of an ecosystem that bridges and empowers youth across the continent and the diaspora, Rwanda founded YouthConnekt Africa. The platform mobilises different stakeholders for various programmes, including the upskilling and financing of youth-led enterprises, as well as connecting African youth incubation hubs worldwide to facilitate their access to markets, capital, and partnership opportunities. 

The potential of governments and external actors such as the European Union to boost diaspora entrepreneurship is important and diverse in its potential. Similar to the ways in which diaspora can and do support entrepreneurship, support from government and international ranges from providing financial and non-financial assistance to existing projects, to leveraging networks, to institutionalising cooperation between host and destination countries. 

Take, for example, the Maghrib Belgium Impulse initiated by Morocco and ENABEL, the Belgian development agency. Through this venture, Moroccan project leaders in Belgium benefit from privileged assistance and networking opportunities from both host and origin countries, which encourages business creation. The project aims to build a streamlined economic environment in which the diaspora is aware of and able to access entrepreneurial opportunities in Morocco.  

Continuously work towards knowing your diaspora

While some African countries are far ahead in their diaspora engagement policies and practices, others are just starting to build solid foundations. For instance, Botswana recently launched its first diaspora engagement policy and is currently undertaking a comprehensive diaspora mapping.

In order to effectively attract diaspora investment and participation that boosts youth entrepreneurship, governments must continuously work to know their diaspora’s profiles, interests, needs, and skills. Accordingly, the Lomé Framework (Decade of African Roots and Diasporas) initiated by Togo and the African Union, reiterates the importance of proactively identifying diaspora to engage them and capitalise on their expertise for the country’s development. 

The different initiatives presented during the government roundtable demonstrate the potential of entrepreneurship as a viable arena of diaspora engagement in Africa and beyond, especially for youth. At EUDiF, we are working on several actions with governments, diaspora organisations and the private sector that support diaspora entrepreneurship and investments. Read more on these actions below.

To continue the discussion on how diaspora contribute to youth empowerment, join the Future Forum on 11-12 May 2022!