Governments across Africa and the wider global south are searching for new sources of long-term finance. Official development assistance from major donor countries fell by 23.1% in 2025, the largest annual contraction on record. Infrastructure needs did not fall with aid budgets, underscoring the need to turn to diaspora capital.

Diaspora bonds deserve greater attention. A diaspora bond is debt issued by a government or public entity and marketed mainly to citizens and descendants living abroad. Investors lend money for a fixed period and receive interest plus their original investment back. Unlike remittances, which usually support relatives and household needs, a bond asks people to place personal savings at risk for a public investment.

Too many governments approach this market as an extension of fundraising. They often invoke identity, sacrifice, and national duty as a basis for investing. Those themes might attract attention, but they do not answer the questions a serious investor asks. What return will I receive? In which currency? What protects my principal? Where will the money go? Who will verify spending? What happens after a missed payment?

The core constraint is not a lack of affection for home countries. It is the gap between emotional connection and investable confidence.

GERD Demonstrates the Power of Diaspora Capital and Mobilization

Ethiopia’s experience with the Grand Ethiopian Renaissance Dam shows how a major national project can engage citizens at home and abroad. GERD created a shared sense of purpose and gave the Ethiopian diaspora a direct role through outreach, public contributions, and bond purchases. The project showed how clear national importance and sustained engagement can draw diaspora support.

The available evidence does not provide a complete picture of bond uptake, investor returns, or repayment performance. Still, GERD offers a useful lesson. Strong public support works best when paired with transparent reporting, clear repayment terms, investor protections, and independent oversight. This combination would help turn diaspora enthusiasm into a credible and repeatable investment model.

Read the full article about diaspora capital and mobilization by Nii Simmonds at Devex.