The African Union (AU) Executive Council has approved the "Strategic, Business, and Operational Framework for an African Diaspora Finance Corporation (ADFC)" as the framework for the African Union (AU) legacy project on diaspora investment.
According to an AU document made available to the Communication for Development and Advocacy Consult (CDA Consult) in Tema, this came after approval by the African Ministers of Finance in December 2021 and consideration by the relevant sub-committee of the AU's Permanent Representatives Committee (PRC).
The AU's decision, according to Mr. Albert Muchanga, Commissioner for Economic Development, Trade, Industry, and Mining, is "historic."
He recalled that a decade ago, in May 2012, at the Global African Diaspora Summit in Johannesburg, South Africa, the Heads of State and Government committed to a legacy project on diaspora investment for the first time.
Commissioner Muchanga thanked all of the AUC's Member States, stakeholders, and development partners for their support and participation during the lengthy formulation and consultation process.
Professor Gibril Faal, the AUC Lead Consultant on Diaspora and Innovative Finance, author of the ADFC Framework Report, and originator of the Remittance Match Funding (RemitAid), was recognized for his vision and long-term dedication to increasing and enhancing diaspora contributions to development.
He also encourages all development and corporate partners to join forces with ADFC, beginning with the Remit Aid scheme, to take advantage of the diaspora's untapped investment and finance opportunities.
Following the adoption, the AU Commission will conduct a new feasibility study that will cover business operations, investment planning and criteria, and the use of ADFC funds.
According to the AU, ADFC will be established as a non-AU continental finance institution that will operate as a social enterprise and collaborate with other African and worldwide finance, development, and diaspora organizations. The first phase of the ADFC implementation included the launch of Remit Aid, an innovative finance plan.
According to the African Union, ADFC will develop, issue, and administer Diaspora Bonds and Mutual Funds in collaboration with partners in order to harness and channel diaspora funds and resources into socially responsible and impactful businesses in Africa's priority areas.
According to the African Union, the ADFC profits and surpluses would be invested in a legacy Endowment Fund, with income from the Endowment Fund paid in the form of grants and soft loans to African development organizations and institutions in the diaspora and on the continent.