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									DFID Working with the Diaspora:
     Investment and Africa

     Lisa Curtis – Private Sector Adviser, Sierra Leone
     UK Department for International Development
     6 October 2006

                           1 Palace Street, London SW1E 5HE
            Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA
Why DFID works with the Diaspora

We will `build on the skills and talents of
migrants and other ethnic minorities
within the UK to promote the
development of their countries of origin’

The 1997 White Paper International Development, Eliminating
World Poverty

       Two main strands to DFID’s work:
                  • Diaspora as a source of funds
                  • Diaspora as investors
                                                        Page 1
Diaspora as a source of funds
 Remittances greater than aid flows:           Our aims:
                                       Remove policy, legal and funding
                                       barriers to remittance flows

                                           •   Lower costs
                                           •   Increase transparency
                                           •   Expand choices
                                           •   Improve access
                                           •   Increase impact on

                                                                    Page 2

                        Page 3
Diaspora as Investors differ from
traditional investors

 Investment Objectives:           Risk Assessment:

 • Commercial objectives          • Better-informed through
                                  social networks
 • Social investment objectives
                                  • Know how to access market
 • Personal commitment
 • Building a future for family
                                  • Know how to navigate official
                                  •Longer investment horizon

           • Diaspora investors are early risk-takers
           • Well-placed to invest in SMEs

                                                                    Page 4
Diaspora as Investors: Managing
investor perceptions
                               Investment Flows (Illustrative)

                 High           Investment climate reforms
                 barriers to    take effect
   Value Index


                                                             Zone of market imbalances:

                               FDI                                information, access,

                                                                  limited competition.
                 1    2    3    4    5   6    7    8   9     10    11   12    13     14

                                                                                          Page 5
DFID’s work with Diaspora in
Sierra Leone
          In Sierra Leone:                     In Diaspora:
   SL Business Forum -                • Sierra Leone Diaspora
   Diaspora Activities                Network (UK)
                                      • Sierra Leone Network (USA)

   • Private sector contributing to   • Dissemination channels for
   Technical Committees advising on   information on reform programme
   Admin Barriers reforms and
   National Private Sector Strategy   • Outreach on changing
                                      investment climate, investment
   • Diaspora group formalising and   opportunities, etc.
   participating in public-private
   dialogue on policy reforms         • Participants at International
                                      Investment Forum and other

                                                                        Page 6
DFID’s work with Sierra Leone
Diaspora: challenges and next

  • Understanding real drivers of investment decisions:
  forthcoming study on investor perceptions and criteria
  • Mobilising human resources as well as funds: PSD
  Strategy Programme supporting initiatives that assist
  diaspora entrepreneurs to access domestic finance
  • Repatriating skills: With Africa Recruit, targeting diaspora
  for recruitment to international positions in donor-supported

                                                                   Page 7

Xavier Lecacheur, Financial Sector Team

Lisa Curtis, Private Sector Adviser, Sierra Leone

                                                    Page 8

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