Why the refugee economy is good for African countries

Long viewed as a social and economic burden to host countries, migrants moving into and within Africa are in fact an asset that could boost economic growth and productivity, and deliver a significant increase in GDP per capita by 2030, if properly managed. In a new report, the United Nations Conference on Trade and Development (UNCTAD) says that country-to-country migration in Africa is of benefit to both the nation of origin and the nation of destination. “Population movements across borders often offer individuals a chance for a better life, with the social and economic benefits extending to both source and destination countries,” said UNCTAD Secretary General Mukhisa Kituyi. “Yet much of the public discourse is rife with misconceptions that have become part of a divisive, misleading and harmful narrative.” The UN body said intra-African migration fosters economic growth and structural transformation by boosting trade and productivity, as the new demand for food products and services from refugees in the host countries grows. According to the report, migrants bring fresh skilled and unskilled labour and spend about 85 per cent of their incomes in their new countries, offering a huge potential for host nations to extract economic benefits from them. In 2008 for example, migrants in Ivory Coast contributed to about 19 per cent of the GDP while Rwanda and South Africa are estimated to have generated 13 per cent and 9 per cent of GDP in 2012 and 2011 respectively from refugees. “African countries can yield benefits by aligning migration, trade and investment policies with development objectives, harnessing diaspora for productive investment and adopting flexible labour policies to ease migrants’ mobility,” the report notes. Humanitarian aid While mass migration of refugees means development gains lost at home and a significant strain on the host countries which leaves many of them dependent on international humanitarian aid, the report maintains that in the long term, it does not stifle social development in both the sending and receiving countries. “An examination of the parallel changes in recent poverty headcounts and migration patterns reveals that there is little difference between the top receiving and top sending countries,” the report notes, citing countries like Burkina Faso and South Africa that have experienced the greatest poverty reduction. Remittance flows, which accounted for 51 per cent of private capital flows to Africa in 2016, are a key channel for improved welfare in families and communities in sending countries. They are also are a key contributor to the economies of countries such as Liberia and Lesotho where remittances make up about 26 per cent and 18 per cent of GDP. According to UNCTAD, if properly managed, global migration could boost Africa’s GDP per capita to $3,249 in 2030 from $2,008 in 2016, at an annual growth rate of 3.5 per cent. Intra-African migration has grown to 19.4 million by 2017, from 12.5 million in 2000, while the stock of international migrants originating from Africa and living outside the continent increased from 6.9 million in 1990 to 16.9 million. This is way above the 5.5 million migrants from outside Africa that the continent received. UNCTAD says migration and trade are two sides of the same coin and will help boost the impact of the recently signed African Continental Free Trade Area and the Single African Air Transport Market agreements. “The report contributes to a better understanding of the implications of intra-African migration for the continent’s socio-economic transformation,” said Junior Roy Davis, a lead author of the report. It complements previous studies that have shown that migrant and refugee populations are an asset rather than a burden on the local economies. For example, the Economics of Refugees and their Social Dynamics in Kakuma, Kenya,” released by the World Bank last year, notes that refugees in Kakuma camp in northwestern Kenya boosted overall income and job creation by 3.4 per cent and three per cent respectively. Consumption of local staples and dairy products grew by 35 per cent, expanding the revenue base for smallholder farmers and herders. A 2016 report by the World Food Programme on the impact of international refugees on Uganda’s economy showed that cash, food and land assistance had a multiplier effect on the national economy. As at April this year, Uganda hosted over 1.5 million refugees driven by conflicts from their countries, the majority of them – 1,053,598 – being from South Sudan. More than 2.5 million South Sudanese have fled to neighbouring Sudan, Ethiopia, Kenya and the Democratic Republic of the Congo due to the ongoing conflict. Agencies

News

Why the refugee economy is good for African countries