Tap Diaspora remittances for infrastructure and development financing

It is good news for the government to consider tapping into the Ksh. 500 billion diaspora bond as an alternative to finance major infrastructure works and projects, including the modernization and construction of Jomo Kenyatta International Airport (JKIA). Kenya has a resilient and reliable diaspora that is economically endowed as shown by the latest Central Bank of Kenya (CBK) report that indicated that Kenyan diaspora sent home $2 billion or Ksh. 258.9 billion during the first five months of the year 2024, representing 18.9 percent jump inflows compared to similar period last year. Tradition Diaspora financial source destinations are still way above the new source of remittances, but there are increased earnings from new destinations where Kenyans have emigrated to. New destinations like Australia recorded diaspora remittances of $64.13 million, Canada made $50.32 million, United Arab Emirates made $48.1 million and Germany made $89.3 million. Diaspora bonds and remittances are an ideal source of infrastructural financing because Kenyan diaspora is one of the best in Africa. Four issues are key as we tap into the diaspora bonds. First, Diasporians interests should be protected and incentivized by coming up with more platforms to help and facilitate networks and partnerships between diaspora investors, local entrepreneurs and stakeholders. These forums could include benchmarking and knowledge exchange programmes, investment forums, opportunities and partnerships, including the operationalization of Public Private Partnerships (PPPs).

Secondly, is to embrace and leverage on globalization, which is the defining present and future of development cooperation and partnership, a concept which has been embraced by the Kenyan diaspora. The future will be shaped by greater interconnectivity, world trade rules and regulations and countries which have strategically prepared themselves will reap big. Thirdly, diasporians have played key roles in fostering patriotism, national unity, prosperity and driving socio-economic development through their remittances. They have joined hands in building our nation through small but impactful ways and actions and infrastructure bonds provides an opportunity in these directions. US President JF Kennedy implored upon Americans “Ask not what your country can do for you, ask what you can do for your country”. Fourthly, diasporians should be assisted to invest back home through establishment and operationalization of various instruments, among them the diaspora bond, which can be used for infrastructure financing, bank capitalization and debt management. Attractive diaspora bonds success characteristics include: strengthened governance of the bonds through adequate reporting; clearly demonstrated link between the bonds and credible country development strategy that advances sustainable economic growth and fosters a conducive investment climate; targeting specific projects or enterprises that produce sufficient economic value to support repayment of the bond, and meeting significant needs of the broader population; and  enhancing the credit of bonds in line with the standards of international development agencies and financial institutions. Dr Giti is an urban management, public – private partnerships (PPP) and environment specialist. mutegigiti@gmail.com , @danielgiti