Your grandparents may have used Western Union to send and receive telegrams, but the world’s first telecommunications firm is now a US$5 billion financial services company. Much of Western Union’s revenue comes from remittances sent abroad. Now the company moving into a new adjacency and will partner with the U.S. Agency for International Development (USAID) to launch the second African Diaspora Marketplace (ADM). In 2010, the African Diaspora Marketplace awarded more than a dozen matching grants of $100,000 each to winning business entries in seven countries. In the second African Diaspora Marketplace, the number of grants awarded will be determined based on grant pool and program need, and is likely to be in the range of 15 to 30 businesses. The matching grant size is expected to be up to US $50,000, with an additional supplement of US $25,000-$50,000 in technical assistance.
The goal to link African immigrants with businesses based in their homeland is just another step into what has become a global phenomenon. Despite western nations’ increasingly anti-immigration policies, diaspora business networks that go as far back as Huguenots, Jews and Armenians sparked economic activity that changed the world and show zero sign of slowing down. With at least 215 million first generation immigrants living across the globe, their numbers combined is larger than the population of Brazil.
These immigrants in turn have been the catalyst of business networks that crop up in the most unlikely places: Lebanese in Brazil (which has more Lebanese than Lebanon), Persians in Los Angeles and west Africans in Korea and China. Now the Western Union-USAID partnership could help kickstart the exchange of business, and ideas, between Africa and North America.
That Africa is the target of this program should be no surprise. Despite some hiccups over the past decade, foreign direct investment (FDI) should increase from US$84 billion last year to US$150 billion by 2015. But most of that investment is not from big corporations and governments like China; small and medium sized enterprises (SMEs) are the driver of this investment, and the reasons are clear. First and even second-generation immigrants still have strong ties to their fatherland or motherland. Those immigrant networks, and of course the language, help cement trust that in turn create deals. Whether those immigrants stay in their adopted countries or move home, they often generate an economic footprint that crosses an ocean or two and lasts for decades.
This move to boost business ties between Africa and the United States comes at a time when African countries are breaking free from decades of colonialism, corruption and war. Rwanda has a booming economy. Ghana has thriving telecommunications and energy sectors. Liberia is healing after a brutal civil war. And Mozambique is rich in resources and has an opportunity to build a thriving tourism sector. These countries are among 18 nations in which the Western Union-USAID program will affect if the program succeeds.
Pictured: Dakar, capital of Senegal, one of the ADM target countries. Photo courtesy of Wiki Commons.