How tapping into the power of the global Black economy can boost Africa’s innovation and prosperity

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Robert Beamish, Deveney Smith

• More than 200 million people of African descent live outside the continent and will soon make up over 25% of the global population.
• Innovation, community engagement and diaspora insights can help reshape the African continent’s vibrant landscape of opportunity and growth.
• With knowledge of technologies and industries acquired abroad, the African diaspora is uniquely placed to develop solutions tailored to Africa’s needs.

With more than 200 million people of African descent estimated to live outside the African continent, and another 1.4 billion-plus people living within, there is no denying that the African diaspora continues to develop as a demographic that will soon make up over 25% of the global population.

However, the success of the population depends on a transformative journey through the intertwined realms of technology, economic potential and cultural exchange in Africa and its diaspora.

Through innovation, community engagement and diaspora insights there is a palpable movement to reshape a vibrant landscape of opportunity and growth.

The diaspora’s contribution to economic growth in Africa

With more than 70% of the African continent lacking internet access, digital literacy is one of the main developmental challenges on the continent. Despite this, the continent has seen the emergence of technological innovations – in sectors such as agriculture, healthcare and fintech – that are fostering economic growth, solving social issues and narrowing the digital divide.

Some of the most noticeable and impactful innovations are the mobile money platforms Wave in Senegal and M-Pesa in Kenya, African e-commerce startup Wasoko, and healthcare startup Pharmarun in Nigeria.

However, it is noteworthy that most of these innovations have non-African founders, which contributes to fostering a dependency mindset in young Africans. What if the African diaspora was a driving force behind the continent’s economic growth by investing in Indigenous innovation?

The diaspora has immensely contributed to Africa’s development. The skills and knowledge acquired by experiencing cutting-edge technologies and industries that are hardly found in continent, paired with an understanding of cultural practices, have placed the diaspora in a unique position to develop solutions tailored to Africa’s needs.

In addition, the remittances they send to the continent often outweigh the foreign direct investment and developmental aid. They contribute to innovation by giving the youth access to educational opportunities that open the door to understanding the issues in their communities and working toward solving them.

Channelling those skills and contributions towards the growth of an African-owned innovation ecosystem could place millions of young Africans at the centre of solution building and unleash the potential technology and innovation have to drive socio-economic development across the continent.

Increasing the wealth of the African diaspora

As the Black population continues to grow and innovations and technologies become increasingly available, an environment of economic potential is cultivated that could boost local communities and beyond.

Research underscores that the economic advancement of Black individuals transcends personal prosperity—it catalyses a ripple effect that reshapes entire communities and contributes to the broader global economy. Accordingly, access to market opportunities will continue to be critical to building sustainable wealth across the diaspora.

In 2021, the estimated spending power of the Black population in the US was $1.7 trillion. Despite that figure increasing over time, the net worth of the same community decreased by 14% due to several factors, including the reduction in long-term investments such as real estate acquisitions.

Understanding how this group accesses and leverages wealth is critical to ensuring their future economic contributions drive innovation, foster diversity, and expand markets. Local structures like community development financial institutions (CDFIs) and minority depository institutions (MDIs) present an opportunity to invest in the supply of innovations and businesses demanded in historically underserved communities.

Connecting cultures through trade

Diasporas from across the African continent exist in every part of the world, contributing to economies and sharing culture while having direct or indirect ties to the continent.

The economic potential of emerging technologies, innovation, capital flow, and spending power from diaspora communities and African peoples on the continent lies dormant unless the ties and connections between them are deepened.

People-to-people connections are the foundation of business relationships and that’s why conferences are still successful, because relationships and common ground are the foundation of business. African diasporas around the world have unique insights, market intelligence and spending power as consumers that could act as a catalyst for market expansion for African businesses seeking partnerships, market share and capital.

Though financial contributions like money transfers from the African diaspora play a vital role in reducing poverty, it’s critical that relationship-based partnerships have access to capital to deepen their investments which ultimately improves household incomes and promotes other investments and entrepreneurial ventures.

DISCOVER

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Africans in the diaspora have the potential to be the innovators, researchers and investors that will empower the next generation and boost economic prosperity through technology and innovation.

Through investing with local institutions and fostering deeper connections across the African diaspora and Black cultures, there are endless opportunities to have real impact on the economic mobility and wealth of the population.

Maureen Jessica GABA, Cotonou Hub – Global Shapers Community and Founder of Saava tech accelerator, and Angèle Melly Yanga, Yaoundé Hub – Global Shapers Community and Managing Director of Bridging Afrika, also contributed to this article.

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