How Migration Can Fuel Africa’s Rise

 Olawale Akanbi

Ibukun, a 26-year-old software developer in the IT department of one of Nigeria’s tier-one banks, recently resigned. When asked why he resigned, he said: “I gained entry into one of the online boot camps organised by an international tech company to develop my skills further and write exams, and I would qualify for a job role thereafter.”

The infectious courage displayed by this young man is replicated across the length and breadth of the African continent today. From the bustling streets of Lagos to the serene landscapes of Nairobi, the mass exodus of African talent is palpable. Fuelled by economic disparities, climate uncertainties, and geopolitical shifts, millions are crossing borders in pursuit of brighter futures. 

It is not a new phenomenon. Throughout history, people of all ages, races, and social classes have migrated across borders. This movement, a fundamental aspect of human existence, has shaped nations, driven progress, and created wealth. Driven by the desire for better opportunities, safety, and health, migrants have continuously sought new places to live and work.

Migration occurs for various reasons and manifests in different forms. These include urban-rural (or vice versa) migration within a country, intra-continental migration within a continent, and international migration across borders. For this discussion, the focus will be specifically on international migration.

Since the beginning of 2022, there’s been a significant rise in people migrating across borders. This upsurge is likely due to a combination of factors, including the recent economic hardship caused by the COVID-19 pandemic, worsening climate issues, and political unrest in some regions.

According to the United Nations, around 2.3 million Africans yearly migrate from Africa to Europe and the Americas. This adds to the already large number of Africans living abroad, with an estimated total of 170 million Africans spread across the globe.

The mass migration of Africans can be attributed to several factors. A key driver is the desire for economic improvement, fueled by the continent’s underdevelopment and young population. However, this seemingly negative trend also presents opportunities that can be leveraged for its growth.

Despite the challenges it presents, international migration is a significant economic force. It generates an annual output of around $9 trillion globally, which is expected to more than double by 2050, reaching $20 trillion a year. This presents a unique opportunity for African businesses and governments. By being proactive, they can leverage this trend and turn a seemingly negative situation into a positive one.

The outcome of this mass migration scenario, whether it poses a threat or presents an opportunity for businesses and governments across Africa, hinges on its management. Here are some strategies African countries can adopt to reframe migration as an opportunity and leverage its potential benefits.

DISCOUNT THE LOSS

There’s a tendency to focus on the downsides of migration, such as businesses losing skilled workers, manufacturers facing decreased demand, and societies losing their brightest minds.

However, a different perspective exists. Africa faces high unemployment, with a vast gap between jobs needed and jobs created. Sub-Saharan Africa needs 18 million new jobs annually but only creates 3 million. Meanwhile, developed economies are experiencing an ageing population and a critical shortage of workers. By mid-2022, the world’s 30 largest economies had 30 million unfilled jobs, representing an aggregate $1 trillion to $3 trillion in lost productivity annually.

This presents a unique opportunity. African governments can partner with countries facing labour shortages through bilateral agreements. These agreements could involve creating training centres in Africa for young people to develop skills needed in the partner countries. The international partners would provide training resources, while African nations would recruit and train their citizens. Additionally, a portion of the salaries earned by these workers could be directed back to their home countries, boosting foreign reserves and investments.

This type of collaboration is already happening. For example, Egypt and Greece recently signed a deal allowing 5,000 Egyptian seasonal farm workers to fill 30,000 open positions in Greece for nine months.

GAINS FOR AFRICA GOVERNMENTS

Through this partnership, African governments can establish a pipeline of skilled African youth who can be exported to generate foreign exchange inflows. Some may also be retained to address domestic skill shortages. Research indicates that there are approximately 50 million unemployed and unemployable youth across Africa, such that if jobs were created, there would be a gap in the skilled workforce to take up the roles.

The revenue generated from expatriate taxes will be remitted to the governments of the originating countries, and migrants also send money back home to support their families. For instance, a recent Central Bank of Nigeria report revealed that international remittances exceeded $1.3 billion in February 2024. This trend of international remittances to Africa has increased and has become a significant source of foreign exchange earnings for many African countries. For example, Kenya’s diaspora remittances surpass its export earnings combined, with a projected growth of 3.7% in 2024.

Moreover, migrants often reinvest capital and transmit innovative ideas to their countries of origin, leveraging global networks for mutual benefit.

Additionally, bilateral cooperation enables governments to gather comprehensive data on citizens leaving the country, enhancing their ability to protect their interests and reducing incidental costs for embassies abroad. This arrangement also alleviates short- to medium-term unemployment pressures on the government and reduces the demand for foreign exchange, which is required for visa fees, travel expenses, and proof of sustenance.

Furthermore, governments can create an enabling environment for local businesses to thrive around human resources development and the value chain, fostering economic growth.

GAINS FOR INTERNATIONAL PARTNERS

Conversely, international partners benefit from a reliable workforce stream to fill their burgeoning job vacancies, thereby maintaining internal revenue flow. Some migrants may also be retained to bolster population growth, support ageing populations, and stimulate economic growth in host countries.

Migrants contribute substantially to their host countries, with an estimated 85% of their earnings spent locally. They also facilitate the transfer of knowledge and enrich societal diversity and culture. For instance, cities like New York have thrived on the contributions of migrants, enhancing diversity across various facets of society, from cuisine to art and economic output.

According to a report by Boston Consulting Group, a significant portion of Fortune 500 companies owe their origins to immigrants, with 45% founded by either immigrants or their children. Additionally, 50 out of 91 startup companies valued at over $1 billion had at least one immigrant founder.

Immigrants also play a vital role in driving the economy of destination countries. Studies indicate that since the 1970s, approximately 30% of all increases in per capita productivity in the US can be attributed to immigrants collaborating closely with native inhabitants.

Through organised cooperation, destination countries can effectively plan for and sustainably grow their economies, leveraging the contributions and talents of migrants for mutual benefit.

GAINS FOR MIGRANTS

In these arrangements, migrants enjoy significant advantages. They receive comprehensive training and become job-ready, securing employment in developed countries under controlled and favourable conditions.

Moreover, within the cooperation framework, migrants are spared the arduous visa processes, eliminating the risk of falling victim to fraudulent immigration schemes or being tempted into unsafe border crossings.

The migrants are equally relieved of the financial burden typically associated with migration, such as accumulating large sums of borrowed funds that are difficult to repay.

Given the financial benefits of working in developed nations, migrants are more likely to save enough money to return home and establish businesses. They can leverage the skills and technology acquired abroad to drive growth and innovation in their home countries.

Research by BCG highlights examples like Faqir Chand Kohli, an Indian-born talent who returned home after studying at MIT and working in Boston, New York, and Canada. He played a pivotal role in transforming Tata Consultancy Services into India’s largest IT service company. 

Today, the strength of India’s IT industry largely stems from skilled professionals who returned to their homeland after receiving training abroad.

CONCLUSION

Beyond government initiatives, there are exciting opportunities for private businesses to participate. The growing demand for skilled workers presents a chance to create a pool of trained professionals ready for domestic and international employment.

A critical concern in Africa is the need for preparedness for the fourth industrial revolution. These bilateral agreements can be vital in equipping young Africans with the necessary skills to fill critical gaps within the continent’s workforce. This skilled talent pool can then be strategically “exported” to international markets, further boosting Africa’s economic footprint.

Creating migrant networks through these partnerships offers another advantage – enhanced global trade. African countries are well-positioned to develop new companies and industries. These migrant networks can serve as vital channels for transferring services, goods, and technology, fostering international commerce and economic growth.

The development of skilled workers presents a unique opportunity to create a thriving training industry within Africa. Andela’s success story exemplifies the potential in this sector. By investing in skills development, African nations can cultivate a domestic training ecosystem that caters to both internal and international workforce needs. This, in turn, will drive national economic growth.

While foreign organisations are currently capitalising on the training needs of African healthcare workers to facilitate migration for their benefit, a more collaborative approach holds immense potential. By working together, African governments and businesses can ensure that these training initiatives translate into tangible gains for the continent and its citizens. Together, they can rewrite Africa’s story. 

*Olawale Akanbi is a seasoned marketing professional with over a decade of experience, who specialises in driving growth through strategic marketing initiatives, particularly in the areas of digital payments, merchant acquiring, consumer goods, and financial inclusion services. Currently serving as the Divisional Head of Growth Marketing for Merchants & Ecosystem at Interswitch Group, Olawale writes from Lagos, Nigeria.