African Context

The Direct Expatriate Nationals Investment (DENI) proposal was originally designed as a Debt Relief and Poverty Reduction program but has since morphed into Enhanced DENI as an External Resource Mobilization and Poverty Reduction Program for countries that have received massive debt cancellation from the HIPC Program, mostly in Africa. With the changing international politics (thanks to the G8 Summit 2005 in the UK), debt can be cancelled with the stroke of the pen, but poverty cannot be cancelled with the stroke of the pen. Hence, the enduring need for DENI as a poverty reduction program.

We, the African Diaspora, constitute the greatest Africa’s offshore asset and the most indispensable catalyst in the accelerated development of our home countries because we have a permanent vested interest in the welfare of our people. The ever-growing African Diaspora is poised for this unprecedented role by virtue of our remittances which are already a significant and growing portion of the GNP of our countries.

The sheer magnitude of remittances to Africa is staggering yet Africans have nothing visible and collectively owned to show for it. This phenomenon is apparent in virtually all African countries – a lot of money pouring in from the Diaspora but nothing monumental to show for it. The aggregate volume of remittances to Africa now exceeds all forms of foreign aid combined. And there is more where that comes from. Thus, we as Africans both at home and abroad are only limited by our creativity in terms of how best to exploit this external “gold-mine” of private funds for the common good. DENI is one such example of creativity that Africans in the Diaspora have embraced wholeheartedly.

What is DENI all about?

The millions of expatriate Africans living and working abroad today are Africa’s most precious and under-utilized resource. These individuals are not only earning money abroad and sending some of it back home to their families, but much more importantly they also represent an incredible pool of human resources in expertise, knowledge, education, experience, entrepreneurship and enthusiasm that can be deployed creatively on a host of development fronts at home.

We, in the Diaspora have done two things, namely: we have sent money home primarily for consumption (to reduce poverty) and those of us who are financially able have also sent extra money home to micro-finance SMEs for our relatives as well as contribute to all kinds of non-profit community development projects in our villages. We are now looking to go to the next logical step for remittances - investing in large-scale enterprises starting with privatization of our country’s state-owned enterprises (SOEs).

DENI is all about creating millions of new owners of income-generating assets as opposed to a handful of millionaires. This is good for the country because widespread ownership of assets creates a robust economy that is good for everybody - job seeker as well as investor. That is the thrust of DENI with its most outstanding attribute as a people-driven initiative, which is immensely empowering. This is truly visionary. DENI is an African people’s solution for poverty reduction. We now have an emerging website that is entirely devoted to this initiative for all Africa at www.DeniAfrica.com on which we will be showcasing DENI developments in any African country that launches it.

The ingenuity of DENI

In a nutshell, the ingenuity of DENI is to mobilize expatriate Africans (living and working in the West) to pool their remittances country-by-country to purchase outright (or buy into), at the very least, one of state-owned enterprises (SOEs) in their own countries that are slated for privatization, resulting in widespread ownership of these assets by the country’s own nationals and the reinvestment of their dividend earnings ploughed back into the economy, leading to massive economic stimulation, accelerated growth and poverty reduction.

The DENI proposal has great merit in its universality and simplicity. The goal of the DENI, in the first round, is to raise as much as $1 billion dollars for the government that is not a loan and is not a grant. And if both sides – the government and the people – are happy with the success of the first round, we will arrange to do it again and again. In this initiative, there will be no strings attached, no humiliating conditionalities and no donor interference. The program will be totally owned by the African governments and their very own nationals at home and abroad. All this in exchange for asset shares in privatized state-owned enterprises (SOEs) - thus keeping the family jewels in the family, instead of selling them to foreigners - exactly the way Africans want it, to avoid foreign dominance of our economies.

Many African governments are determined to become “middle-income” countries by 2015 (Vision 2020, Vision 2030 as they say). To achieve this ambitious goal, they must seek creative ways to double (or triple) the “middle class” populations rapidly. DENI will effectively and efficiently help them achieve this worthy goal.

DENI is based on 5 premises

The ultimate aim of DENI is to stimulate the African economies and create a Culture of Ownership to replace a culture of dependency on foreign aid. The appeal of the DENI model is based on 5 premises – all of them valid and ever so true.

First: that Africans in the Diaspora have tremendous faith in the remittance lifeline because of our extended family structure. We have sent money home when the international community abandoned some of our countries to their own devices; we have sent money home in the middle of civil wars, we have sent money home where there is no bank, we have sent money home even where there is no government as in the case of Somalia. In 2005, Relief Agencies working in Somalia spent $100 million but estimated that $850 million worth of remittances were sent in by Somalis abroad. Such is the audacity of the African Diaspora in their determination to help their loved ones.

Second: that we, in the Diaspora have done two things, namely: we have sent money home primarily for consumption (to reduce poverty) and we (those of us who are financially able) have also sent extra money home to micro-finance SMEs for our relatives. We are now looking to go to the next logical step for remittances - investing in large-scale enterprises starting with privatization of our country’s State-Owned Enterprises (SOEs).

Third: that remittances from the Diaspora stimulate our economies by increasing currency flow and consumer purchasing power. These are literally life saving injections, but we can’t help everybody individually in the whole country. If we could, we would, but that is not possible. Instead, when we help our countries economically through an ingenious program such as DENI and the economies improve, the positive effects spill over to EVERYBODY IN THE COUNTRY. The poverty reduction implications are obvious.

Fourth: that DENI represents a major frontline (but as yet untapped) source of self-help development finance. This is to replace the culture of dependency on foreign aid with a Culture of Ownership in home-grown publicly traded companies. This is not about the discredited African Socialism of the 60s or some communist ideology. Ownership has always been there in our culture long before Western civilization came to our shores. We are simply re-asserting what is familiar to us. Our ancestors owned property so recreating a culture of ownership to replace a culture of dependency on aid hand-outs is not foreign to Africa.

Fifth: that Government officials who frequently travel abroad and interact with Africans living and working in foreign lands have noted that most Africans in the Diaspora have a longing to be part of some larger “cause” to relate to on equal terms of engagement for the good of their home countries. DENI provides them with that larger “cause” to belong to on an equal footing with no eligibility restrictions except being an African national of an African country. DENI operates above ethnic lines - it is all-inclusive. This is perfectly consistent with the stated public policy of our governments to bring people from different backgrounds and walks of life together to live in peace and harmony with one another and enhance the welfare of each other.

To be continued next week

Frederick W. Kwoba

Executive Director

US-Africa Business Council, Boston, USA