Tuesday
April 21
2015

Emily Darko

In Ghana, the Diaspora is Fueling a Social Enterprise Liftoff : Often well-funded, well-educated returnees are contributing to a ‘brain gain’

Social enterprise in Ghana is taking off, and Ghanaians returning from living and studying abroad are playing a key role in that liftoff. In a recent British Council and Overseas Development Institute study exploring the landscape of social enterprise in Ghana, one stakeholder suggested that about 60 percent of all social enterprise activity in Ghana is influenced by returnees.

Around 3 million Ghanaian nationals live abroad, mostly in Africa, although there are large Ghanaian communities in parts of Europe and North America; for example, approximately 100,000 people born in Ghana live in the UK, according to the 2011 UK Census. In the last decade or so, political stability and growing economic prosperity have attracted many Ghanaians in the diaspora, including second- and third-generation offspring of migrants, to return to live and work in their country of origin. People come back to retire, to work for big companies, to set up charities, and increasingly, to start social enterprises. Ghana’s Right to Abode Act allows people from the global African diaspora (mostly people whose ancestors were taken out of Africa during the Atlantic slave trade) to settle and work in Ghana. This is likely widening the brain gain significantly.

A stakeholder interviewed for the study suggested that going abroad and returning to Ghana changes people’s attitudes about problems faced by the country. When people travel abroad, they “get exposure from seeing problems from a different perspective. When they are living in Ghana, they don’t see things as a problem that needs to be addressed, they just adapt to the situation as it is. Travelling abroad changes their mindset. They come back and realise they can do something about it.”

Not only do returnees see different opportunities, they often have different opportunities. For example, whereas there is a chronic shortage of finance appropriate to small, start-up businesses in Ghana, many returnees have greater access to capital. Some have savings from having worked abroad, or having studied abroad and secured well-paid jobs on their return to Ghana. Others have access to contacts and networks abroad, such as universities they attended, or know of and have applied for fellowships that provide grants, stipends and non-financial support, such as those managed by Echoing Green and Ashoka.

Social enterprise is growing indigenously in Ghana as well, and social entrepreneurs who have not lived and studied abroad can access global funding and support opportunities. But are there lessons from the returning diaspora that could strengthen social enterprise activity in Ghana?

Much of the social enterprise focus is in urban areas and on people with high levels of education and a strong command of English. This is particularly the case for returnees, whose exposure to Western cultural norms and thought processes may give them an advantage in foreign-originated funding applications and opportunities. Returnees can share their knowledge, experience and skills through social enterprise job creation and through activities of support organisations, such as business development skills provision, mentoring and peer learning.

Returnees can benefit themselves from knowledge and skill sharing with their compatriots, particularly as they may be less familiar with local languages or out of touch with cultural norms and social networks that are vital to engaging effectively with low-income and marginalised groups, as social enterprises seek to do.

In addition, donors, funders, investors and social enterprise support organisations should not only be aware of inherent biases, but develop criteria and due diligence processes, as well as funding decisions, to address them. For example, these groups should explore ways to facilitate applications from people who can’t write a funding application or present their business model in English, and reach out to people who aren’t aware of how and where to access the spectrum of government, donor and foundation funding available.

As well as access to formal finance opportunities and personal savings, returnees may be more likely to have access to more affluent family members and friends willing to provide early stage angel investment in business ideas. There are some exciting initiatives that seek to widen the potential impact of this willingness to invest in business “back home,” such as investment funds using capital from diaspora communities to provide grants and loans to start-up businesses and social enterprises in Ghana.

Returnees to Ghana have set up social enterprises to address the lack of African-authored children’s fiction, to expand the production and nutritional value of the Moringa plant, to set up a centre for support to young autistic people, and to create work spaces and investment funds for social enterprise. Brain gain for social and development purposes, as well as economic growth, is an exciting driver of social enterprise activity in Ghana.

The Ghana social enterprise report can be found here.

Emily Darko is a research officer in the Private Sector and Markets program at the Overseas Development Institute in London.

Categories
Education, Entrepreneurship
Tags
business development, research, social enterprise