Diaspora Bond Or Ghana Diaspora Growth Fund?

Adolf Kofi Afful

Former Chairman – Council of Ghanaian Associations

January 26, 2020

As a keen observer of developments in Ghana, I was struck by the announcement by the Finance Ministry about the future issuance of a $3b Diaspora bond that will be directed towards infrastructure development in Ghana.

I write on this subject regarding the Ghanaian diaspora as I have spearheaded the dialogue a few times in the Ghanaian community here in the Washington DC metro area through the Embassy of Ghana during and after my tenure as Chairman of the Council of Ghanaian Association.

Through efforts leveraged by people from different constituents, we were able to secure the creation of the Diaspora Director at the Ministry of Foreign Affairs during President Mahama administration.

This was followed by the appointment of a senior officer at the diaspora desk at most or all Ghana missions abroad. Through further efforts, President Akufo Addo took the bold step and moved the Diaspora desk from the Foreign Ministry to the seat of government – Jubilee House.

These steps by the various administrations has helped elevate the cause for the proper recognition of the Ghanaian diaspora and the critical role they have played and continue to play in our national development.

In my previous article on this platform dated February, 2017 [A Case for the creation of the Ministry of Diaspora Affairs], I went into detail as to why I believe the vision for a standing Ministry of Diaspora Affairs is the most fundamental step to take if we are to begin to harness the potential of this block of the Ghanaian population. Below are some of the excerpts of the article.

Facts:

• Estimated population of Ghanaians in the diaspora – 1,000,000 people.

• Foreign Direct Investment (F.D.I.) of $1.41b 2016.

• Diaspora Re-investment/Financial transaction in Ghana - $7b plus per annum (compare it to the national budget of about $10b).

• Per Capita contribution is in excess of $7,000 per each Ghanaian in the diaspora.

• Ghana’s diaspora is its largest foreign partner vis-à-vis all foreign donors combined per year. Our commitment is interest-free; it is not a foreign loan in exchange for any bauxite and there is no collateral attached to it.
  
  

Other areas of contribution include the following:

• Banking Institutions and Savings – Over 50 percent of Ghanaians in the diaspora have bank accounts in Ghana.

• Mortgage payments – about 20% of the diaspora hold mortgages in Ghana today.

• Home Town Associations (HTA) – They are key institutions of transnational engagement with our motherland. They represent a significant conduit of identity and purpose and help promote social development. Their contributions are significant and are not limited to development activities like scholarship schemes; healthcare assistance; schools; rural electrification and access to clean drinking water etc.

• Telecommunications – Ghanaians in the US alone spend in excess of $100M per year in making phone calls to Ghana. This does not only benefit The US carriers but the Ghanaian providers as well.
  Consumables –Diaspora local food consumption is in the millions – again strengthening the local Ghanaian economy.

Even though the relationship between remittances and development is multifaceted and complex, financial leverage is very relevant to improving the impact foreign savings has on the individual household. The diaspora community is a critical source to knowledge; expertise; resources and markets for the development of our nation.

A successful relationship between the two i.e. (Ghana and those in the diaspora) is predicated on:
The government’s ability to project a coherent, motivated and progressive body.

The capacity for of our leadership in Ghana to help create an environment and institutions for a sustainable and symbiotically rewarding engagement.

To look at the potential Diaspora contribution only through the prism of remittances and financial flows is to take a myopic view. We cannot measure ones contribution towards development singularly through our financial transactions to our mother Ghana. The added value is the exchange of ideas between the local professionals and the diaspora professionals in the assimilative process of development is the unquantified value of this proposition. This fusion of ideas is how the middle class can grow to help build our nation.
The nation with President Akufo Addo leadership is beginning to recognize the need to pursue and promote the dynamic of the Diaspora and development. The Year of Return in 2019 was a very successful enterprise by all measures (even though the numbers was a little exaggerated).

I believe the numbers in 2019 was overwhelming to the leadership. It was the first time the leadership has had a visual of how huge and impactful the diaspora power can be harnessed to aid in boosting the development of the nation.

In addressing my real concerns with the proposed initiative of the $3b Diaspora Bond, I will like to say that it is a step in the right direction but the sequencing of it is wrong in my opinion. I believe there are certain fundamental things that ought to happen on the ground before the bond issuance takes place.

1. The Electoral Commission must effect a successful system to pave the way for those in the diaspora to vote in the 2020 election as has been directed by the courts.

2. The preparation of a Ghana Diaspora Policy.

3. The Involvement of the Diaspora in the realization of the Ghana National Development Plan to be recognized especially in driving investments in the priority sectors of the economy.

4. The need for the government to engage with the Diaspora in a sustainable and mutually rewarding way across the socio-economic- cultural and political space is at the heart of our argument for a standing Ministry of Diaspora Affairs.

Mandate:

• This Ministry shall serve as a one-stop address for Ghanaians in the Diaspora.

• There shall be an appointed Cabinet Minister from the Diaspora.

• The Ministry shall have its budget from parliament just like any of the other ministries.

• The Ministry will be the nodal institution for all matters relating to Ghanaians overseas, which will include Persons of Ghanaian Origin,

•  Non-Resident Ghanaians and Overseas Citizens of Ghanaian/African descent.

• The Mission is to establish a vibrant institutional framework to facilitate and support mutually beneficial networks with and among Overseas Ghanaians and people of African descent to maximize the development impact for Ghana and enable the Diaspora to invest in and benefit from the opportunities in Ghana.

If this mandate is in place, then the $3b bond will definitely have the key stake holders (the Ghanaian diaspora) involved in the setting up of this instrument.

How can the government of Ghana decide to issue a $3b Diaspora bond to those in the diaspora without any stakeholder input?

If the money is going to be used for infrastructure, I ask what percentage of these contracts will be awarded to the Ghanaians in the diaspora.

What percentage is going to be used in the equity markets for the private sector - specifically for diaspora investment projects so the bond rate of return is higher?
Where is the independent body with oversight responsibility regarding this bond? (This must have a majority participation from the diaspora).
Past Governments have taken advantage of this community for too long with no accountability. The diaspora is only important when it is time for an election in which majority do not vote in. It is so convenient to come up with a scheme to raise money from the diaspora when they are yet to vote or contest local elections in Ghana. It is okay to invite Prince Boateng to come to play for our national soccer team (Black Stars) and yet keep him from voting or holding political office.
The mandate for a standing Ministry of Diaspora Affairs ought to be initiated; debated and approved by Parliament for any real development to take place. The Ghana government should show their commitment to this effort and not the “take”, “take”, “take” mentality with the giver having any skin in the game.
I am asking President Nana Akufo-Addo to show his true commitment to the power yet to be realized from the diaspora. This should not be a political slogan. This is time for real visionaries to shine.
I stated at the beginning of this article that the flow of capital to Ghana per annum is in excess of $7b from the Ghanaian diaspora. This block of revenue stream is what sustains the economy and the least that the government MUST execute is the establishment of the Standing Ministry.
The failure to make the Diaspora and Migration Policy as one that is a Development Policy on a government-wide spectrum is the result of the absence of a Standing Ministry for the diaspora.
The state of Israel embarked on this campaign over thirty years ago and continues today. They are a developed nation today because of it. I had firsthand experience in that effort as junior economist in the Mayor’s office in Tel-Aviv after college.
There is a lot of work to be done to harness the potential that is boundless from the Ghanaian diaspora. There should be a standing ministry that puts structures in place to mobilize this giant elephant in the room for the long term development of our nation.
Our first President, Osagyefo Dr. Kwame Nkrumah said these words that are relevant today and I quote “I am not African because I was born in Africa but because Africa was born in me”. He further stated this and I quote “The forces that unite us are intrinsic and greater than the superimposed influences that keep us apart”.
My fellow Ghanaians, our government needs to take a very bold step forward to create a standing Ministry of Diaspora Affairs. I believe that there is a huge opportunity for significant steps to be taken to embrace this simple idea that rests in our core competencies. This idea needs a leader with a vision to imagine and to accomplish it.
I read somewhere that – Imagination is the tool that the heart uses to get what it wants, and it does so by producing a vision that is motivating enough for you and me to act upon. Mr. President, if you can imagine and see this vision that most of us see, you will cease this moment to create a Ministry of Diaspora Affairs. I know this is going to happen now or later, with you or without you. It is a question of who has the spine to put this in place. Mr. President, show us that you truly believe in the Year of Return and Beyond by making this simple decision.

Ghana wins by becoming a melting pot of both local and diaspora expertise and ideas. Ghana can win and Ghana must win in this endeavor. It starts with a Standing Ministry of Diaspora Affairs.

Adolf Kofi Afful – former Chairman – Council of Ghanaian Associations (Washington D.C. metro).
Contact: aafful2002@yahoo.com