On February 2-3, 2022, the 40th Session of the African Union Executive Council officially adopted the “Strategic, Business and Operational Framework for an African Diaspora Finance Corporation (ADFC)” as the framework for the legacy project of the African Union. African Union on Diaspora Investments. This came after endorsement by African finance ministers on December 17, 2021 and consideration by the relevant sub-committee of the AU Committee of Permanent Representatives (PRC). The AU Commission will undertake a new feasibility study, covering business operations, investment planning and criteria, and application of ADFC funds.
The ADFC will be established as an independent, non-AU continental financial institution, operating as a social enterprise and working with other African and global finance, development and diaspora institutions. The first phase of ADFC implementation involves the launch of an innovative funding program through the RemitAid™ Remittance Match Funding mechanism.
Working closely with partners, the ADFC will develop, issue and manage diaspora bonds and mutual funds, to harness and channel diaspora savings and resources into socially responsible and impactful enterprises. , in priority sectors in Africa. ADFC profits and surpluses will be invested in a legacy endowment fund, and income generated from the endowment fund will be disbursed in the form of grants and concessional loans to African development organizations and institutions, both in the diaspora than on the continent.
The AU Commissioner for Economic Development, Trade, Industry and Mines, HE Albert Muchanga, noted that the AU’s decision was historic, saying the Heads of State and Government are committed for the first time in favor of a legacy project on diaspora investment ten years 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 lengthy formulation and consultation process.
He thanked Professor Gibril Faal, AUC Senior Consultant on Diaspora and Innovative Finance, author of the ADFC Framework Report and Founder of RemitAid™, for his leadership and longstanding commitment to broadening and strengthening Diaspora contributions to development. He also urges all development partners and businesses to partner with the ADFC, beginning with the RemitAid™ program, to tap into untapped options and opportunities in diaspora investment and finance.
Notes to editors:
The ADFC Framework Report is titled: “Strategic, Business and Operational Framework for an African Diaspora Finance Company: African Union Legacy Project on Diaspora Investment, Innovative Finance and Social Enterprise”. in Africa “.
The original English version is 120 pages, 50,000 words, with 8 chapters, over 60 subsections, 12 tables, over 250 footnotes, over 90 references; and more than 60 experts and stakeholders were interviewed or consulted. The full report is available in Arabic, English, French and Portuguese (and the abridged 24-page version in English) on the AU website:
https://au.int/en/documents/20211001/strategic-business-and-operational-framework-african-diaspora-finance-corporation
https://au.int/sites/default/files/documents/37383-doc-adfc_business_framework_-_abridged_version.pdf
The ADFC Framework Report was first produced in May 2019 after extensive research and consultation by AUC Senior Consultant on Diaspora and Innovative Finance, Professor Gibril Faal. The report underwent further stakeholder reviews beginning in November 2019 in Cairo, Egypt. After a delay caused by the COVID-19 pandemic, consultations and examinations resumed in January 2021.
Following tentative approval in May 2021 and further consultations, on 17 December 2021, at the African Union Specialized Technical Advisory (STC) Meeting on Finance, AU Finance Ministers endorsed the African Diaspora Finance Corporation (ADFC). The ADFC proposal and framework was then deliberated by the AU Permanent Representatives Committee (i.e. Ambassadors) on 20-21 January 2022, which led to the historic decision to adopted by the Executive Council of the African Union on 2 and 3 February 2022.
The ADFC Framework Report provided a new classification of Diaspora investments, namely: Investment for Development: Diaspora Philanthropy (DP); Socio-economic investment: Diaspora remittances (DR); Economic and commercial investment: Diaspora direct investment (DDI); Regulated Financial Investment: Diaspora Portfolio Investment (DPI). He provided detailed qualitative and quantitative analysis. With formal remittances to Africa in 2018 estimated at $86 billion, the report estimated total remittances to be $200 billion, taking into account informal and in-kind remittances. [See chapters 2 and 3]. The ADFC report also presented $33.7 billion as a conservative estimate of the annual volume of savings held by first-generation African migrants living outside Africa. [See page 93].
Ms. Angela Odai (AU CIDO), Ag. Responsible for Citizens and Diaspora, management | | African Union Commission Tel. : +251 115 517 700 | Email: OdaiA@africa-union.org| Addis Ababa, Ethiopia
Teacher. Gibril Faal (GK Partners) gfaal@gkpartners.co.uk
Directorate of Information and Communication, African Union Commission I Email: DIC@africa-union.org
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