Africa’s $100bn ‘secret weapon’

Around 160m Africans live and work in other parts of the world from where they send ~$100bn back home. Dubbed a “secret weapon”, can diaspora remittances power the continent’s companies?

Author

Anthony Miclet
February 21, 2024

Hi there. Welcome to another Daba weekly newsletter!

Despite persistent inflation and currency woes, Africa will remain the second-fastest-growing region this year. That’s according to the latest AfDB outlook, which projects the continent's real GDP growth at an average of 3.8% in 2024—compared to 2.9% globally. 

And impressively, 11 of the world's 20 growth leaders are from the continent. Tap here to discover which economies made the list.

In other top stories: 

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The African diaspora sends ~$100bn/year in remittances. 

This number trumps FDI and overseas assistance in most countries and suggests that the African diaspora can be a reliable source of funding for African investments. 

Our data indicates strong participation of the African diaspora in backing startups, bond issuances, and VC funds. 

Sign up for our next event on Tuesday as we explore the potential of Africans powering the continent's companies and how Daba’s technology provides a seamless, transparent gateway to Africa's best investments.

Here are last week’s top stories

Bitcoin halving

At $52k, April halving and ETFs seen driving further Bitcoin rally

BTC rose above $52k last week for the first time in more than two years after the largest crypto by market cap rallied 10%, extending its relentless rise from $38,500 in late January. A halving event in April is expected to drive future growth into the asset.

Gold recorded a second straight weekly fall after hot inflation data cooled prospects of early rate cuts by the Federal Reserve. Oil rose as geopolitical tensions in the Middle East offset a forecast from the IEA for slowing demand.

The NGX continued its bullish run as the All-Share Index appreciated 3.79% to cross 105,000 points while the BRVM gained marginally for the week.

Election turmoil

Senegal President Sall to implement court order reversing election delay

On Friday, Senegal’s President Macky Sall pledged to organize presidential elections “as soon as possible” after the Constitutional Council overruled his decision to delay this month’s vote.

A day before, the Council, Senegal’s top election authority voided the government’s postponement of a presidential election scheduled for February 25 and its rescheduling for December 15, ruling that the moves were unconstitutional.

The postponement has thrown the country, one of the most stable in West Africa, into political turmoil, with three people reportedly killed and dozens arrested during protests.

Continental first

Africa set to have its first-ever cobalt refinery by the end of 2025

Africa is moving closer to establishing its first cobalt sulfate refinery, a critical development for the continent's lithium-ion battery supply chain. 

Expected to be operational by the end of 2025, this refinery will be among the few outside of China capable of producing this key component.

The project is led by Nigeria-based AFC, which recently signed an expression of interest to provide $100m in financing to Kobaloni Energy to construct the refinery in Zambia.

Headline roundup

A summary of the major business, tech, and finance headlines of the past week.

Macro & Markets

VC Funding & Startups

Other Deals & Expansion

Funds & Accelerators

Startup Opportunities

Discover funding and accelerator opportunities to boost your startup's growth.

Our insight for the week

Get more context into events shaping Africa’s economic landscape.

Putting Africa’s diaspora remittances to long-term work: Remittances from the African diaspora total an estimated $100bn annually, representing a significant source of foreign capital for African economies. 

These funds account for 2-3% of the continent's GDP and support roughly 200m Africans. 

In some nations like The Gambia, remittances comprise up to 30% of GDP.

As such, there is growing enthusiasm for leveraging these sums for long-term development projects, including infrastructure, business investment, and financing government operations. 

However, effectively channeling remittance inflows into such productive uses remains a challenge. 

How can the continent make it easier for diaspora members to invest directly in African companies and funds? 

What policy or regulatory changes could incentivize the productive use of remittances? 

How can technology help enable easier investment across borders?

For instance, Daba’s proprietary technology provides a seamless, transparent gateway to connect diaspora capital with Africa's most promising investment opportunities. 

We will explore these questions and more in the next edition of our Pulse54 newsletter on Saturday. 

Sign up below to get it directly in your inbox.

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Catch you next week!