November 7th, 2013 A Business Plan for Africa Breakaway Sessions 2: Market Enhancement & Segmentation of our target market Session 5: African Diaspora – a high and educated market of 100 consumers and high purchasing power: how to involve them?

2 P OLICY R ECOMMENDATIONS WITHIN THE A FRICA 2.0 M ANIFESTO Recommendations for the Diaspora communities: Create Diaspora Councils abroad in countries with a significant Diaspora presence; Mobilize and organize the African Diaspora in order to act as an effective interface between their country of residence and their home country - they can play a dual role of advisory and advocacy; Increase African Diaspora’s levels of foreign direct investment to their home countries; Encourage African Diaspora to invest in their home countries. It is important that they are provided with information to raise their awareness of investment opportunities ; Africans in the Diaspora should contribute their knowledge, technical expertise and practical experience in key areas such as, for example, energy. Use the Embassies to facilitate interchange between the African Diaspora and their home countries. Recommendations for the African Governments: Issue Diaspora bonds (i.e. bonds designed and marketed to the African Diaspora to raise amounts ranging between US$5-10 billion per year. Tap into the Diaspora pool of talent and where relevant, appoint Diaspora experts as advisory members of high level committees and commissions established by the various governments; Encourage measures facilitating recruitments of Diaspora members in the private sector; Set the adequate framework to promote Diaspora entrepreneurship locally; Put in place a favourable legal framework (legal stability, simplicity and predictability, property and contract rights, reasonable taxation, risk and cost reduction, financial laws, etc.); Ensure ease of investing and attracting knowledge and know-how (e.g.: provide a contact for assistance in Diaspora investment promotion and facilitation; maintain statistics about inward and outward Diaspora investment; operate in a visible, accessible, transparent and accountable manner).

3 K EY F ACTS & F IGURES Fact 1 : The African Diaspora exceeds 100 million people to date. Fact 3 : Remittances from the African Diaspora to Africa amounted to $60.4 billion in 2012 – the largest external source of finance to Africa! 60 million first and second generation Africans outside the continent 40 million African Americans Composition of the African Diaspora: Fact 2 : Diaspora inflow into African economies essentially takes the form of private cash transfers to families ( remittances ), portfolio equity investment in the corporate sector and portfolio investments in the financial market. Fact 5 : The African Diaspora has grown larger, stronger, wealthier, more educated and are currently in a position to become a solid contributor to the expansion of the continent. Fact 4 : The African migrants living outside their home countries are estimated to have more than $53 billion in declared savings yearly. Most of these savings are kept in bank accounts outside Africa or invested in migrants' host countries. (source: Development Finance via Diaspora Bonds, Track Record and Potential by Ketkar&Ratha).

4 L EVERAGING O PPORTUNITIES, A DDRESSING C HALLENGES CHALLENGES The main challenges preventing the African Diaspora’s involvement in the continent’s development are: Unfavorable business environments (as proven by a low ranking of African countries on average in the Doing Business ranking); Complex, unpredictable and unfavorable legal frameworks ; Political instability in some African countries, leading to high-risk investments; Lack of information on potential opportunities in home countries. The key challenge to address is to succeed in creating an investment-friendly environment that provides innovative and secure solutions so that the African Diaspora invests in its home countries.

5 L EVERAGING O PPORTUNITIES, A DDRESSING C HALLENGES Remittances to Africa grew from 8% of global remittances in 2001 to 11% in 2012 (not included unrecorded and informal flows). Intra-Africa remittances increased from $3 billion in 2000 to $5.7 billion in Remittances Sources: Mo Ibrahim Foundation, 2013 / Africa 2.0 Manifesto The Diaspora could play a crucial role in enhancing and enabling FDI into their origin domestic economies – leveraging its knowledge, expertise, experience and extended networks. The Diaspora investors are more likely to invest in economies that others would consider high-risk, simply because they have better knowledge and relationship opportunities that other investors lack. They can combine this knowledge with the skills, knowledge, and networks they have cultivated abroad, yielding important synergistic advantages. They may invest for altruistic reasons – for “love of home country”. 2 Private investments OPPORTUNITIES (1/2)

6 L EVERAGING O PPORTUNITIES, A DDRESSING C HALLENGES Source: Africa 2.0 Manifesto OPPORTUNITIES (2/2): different models of intervention are possible: Cross- border investor networks Diaspora members invest in their origin countries solely or in partnerships. Mentoring / Venture capital networks Foreign start-up firms established by managers and owners of Diaspora origin work with start up firms in their countries of origin to develop and finance commercially viable projects. Outsourcing networks Diaspora business owners outsource some of their operations to firms in their origin countries. Diaspora executives working for multinationals abroad influence investment decisions to outsource operations to firms in their origin countries. Brain circulation networks Bilateral trade Diaspora members’ skills are mobilized to provide managerial and knowledge expertise to firms and R&D laboratories in their origin countries. Diaspora involved in trading with home country and in enhancing the reputation of home country investment climate in the host country.

7 B EST P RACTICES Case Study: Homestrings Homestrings gives foreign investors and the African diaspora access to investment opportunities in Africa and other emerging markets. According to its founder, Eric-Vincent Guichard: “Homestrings allows individual and institutional investors with a means to direct their resources towards initiatives in the emerging markets. Our interactive web portal aggregates demand from investors and allows them targeted access to the same investments that, until now, were only available to the world’s institutional investors.” (source: interview on How We Made It In Africa, February 2013) Best practices on Bond issuance: Israel and India have raised up to around US$36-40 billions equivalent in Diaspora Bonds since they launched those products. A Brazil bond was secured by remittance from workers from Japan and has received a credit rating higher than the Brazil sovereign bond. (source: Africa 2.0 Manifesto) Eric-Vincent GUICHARD, founder of Homestrings

8 K EY Q UESTIONS TO A DDRESS IN T ODAY ’ S S ESSION What should be the role of the African Diaspora in Africa Inc.’s development? How to leverage the African Diaspora’s networks, expertise and knowledge? What innovative solutions can be implemented to attract African Diaspora investors? How to involve the African Diaspora into Africa Inc.’s financing plan? How to facilitate access of the African Diaspora to Africa Inc.’s products and services?

9 A CTION PRIORITIZATION M ATRIX AND S TAKEHOLDER E NGAGEMENT M ATRIX For each identified leapfrogging action, complete the Stakeholder Engagement Matrix below: Complete the Action Prioritization Matrix below with the key short, medium and long-term leapfrogging actions.