By Haruna Gimba
The 40th Session of the African Union Executive Council formally adopted the ‘Strategic, Business and Operational Framework for an African Diaspora Finance Corporation (ADFC)’ as the framework for the African Union legacy project on diaspora investment.
This came after the endorsement by the African Ministers of Finance on 17 December 2021, and consideration by the relevant sub-committee of the AU’s Permanent Representatives Committee (PRC).
The AU Commission shall undertake a further feasibility study, covering business operations, investment planning and criteria, and the application of ADFC funds.
ADFC will be set up as an independent, non-AU continental finance institution, operating as a social enterprise and working together with other African and global finance, development, and diaspora institutions.
The first phase of the ADFC implementation involves the initiation of an innovative finance scheme through the RemitAid™ Remittance Match Funding mechanism.
Working closely with partners, ADFC will develop, issue and manage Diaspora Bonds and Mutual Funds, to harness and channel diaspora savings and resources into socially responsible and impactful ventures, in priority sectors in Africa.
ADFC profits and surpluses will be invested in a legacy Endowment Fund, and income earned from the Endowment Fund will be disbursed in the form of grants and soft loans to African development organisations and institutions, both in the diaspora and on the continent.
The AU Commissioner for Economic Development, Trade, Industry and Mining, Albert Muchanga noted that the AU’s decision was historic, stating that the Heads of State and Government first made a commitment for a legacy project on diaspora investment a decade ago in May 2012, at the Global African Diaspora Summit in Johannesburg, South Africa.
Commissioner Muchanga expressed the AUC’s gratitude to all Member States, stakeholders and development partners who supported and participated in the long formulation and consultative process.
He thanked Professor Gibril Faal, the AUC Lead Consultant on Diaspora and Innovative Finance, author of the ADFC Framework Report, and founder of RemitAid™, for his leadership and longstanding commitment to expanding and enhancing diaspora contributions to development.
He also urges all development and corporate partners to team up with ADFC, starting with the RemitAid™ scheme, to harness the untapped options and opportunities of diaspora investment and finance.