The role of the diaspora in Cameroon’s development efforts ⁰

Over the last decades, many Cameroonians have migrated to other parts of the world, especially to rich countries of the north. These migrations are mostly in search of economic opportunities which are scarce within Cameroon. Migrants who successfully relocate often remit funds to support their families and communities back home. Like in other developing countries, remittances to Cameroon constitute a major source of financial inflows, exceeding foreign direct investment (FDI) and official development assistance (ODA).

Hard-working Cameroon migrants have continued to send money home to help their families and friends, especially in situations of illnesses and when children cannot go to school due to a family’s inability to pay the fees. These remittances have been fostering the country’s economic resilience and recovery. According to the International Fund for Agricultural Development (IFAD) Sending Money Home 2026, remittance inflows to Africa reached an estimated USD124.2 billion in 2025, with Cameroon receiving over a billion dollars. According to the African Development Bank Group, Africa’s leading development finance institution, Cameroon netted about USD 1.2 billion in 2025, accounting for about 8.4% of the country’s national budget.

In 2026, the country’s remittance inflows are projected to grow by some 2.5% if the right conditions are in place. The African Development Bank puts Cameroon’s global diaspora at about 6 million people, about 15% of the country’s total population; a number which can help dig the country’s struggling economy out of the doldrums. Remittances boost a country’s economy by increasing household purchasing power, stabilizing foreign exchange reserves, and acting as a countercyclical buffer during economic downturns.

At the microeconomic level, direct cash flows raise disposable income for families, lifting millions out of extreme poverty. A portion of the funds remitted usually get spent on private healthcare, nutrition, and schooling, building a healthier and more educated workforce. Also, families invest residual money into small enterprises, farming inputs, and local construction, thereby stimulating local commerce and reducing unemployment. Receiving regular cross-border funds helps the country’s unbanked households to access formal financial services, savings accounts, and microcredit.

At the macroeconomic level, remittances result in aggregate demand and GDP growth. Increased spending on goods and services circulates through the local economy, driving up national gross domestic product (GDP).Inflows of hard currencies (such as US dollars or euros) help to stabilize the local exchange rate and build up national foreign reserves. Remittances go a long way in offsetting trade deficits by providing a reliable, primary source of external income which often exceeds foreign aid or foreign direct investment (FDI). Migrant remittances also help to build an economy’s countercyclical resilience. Unlike volatile foreign investments which flee during crises, remittances often spike during natural disasters or domestic downturns to support family members.

Like other development finance institutions, the African Development Bank has been pushing for policy reforms which can help African countries to issue diaspora bonds to channel these flows into long-term infrastructure and development projects. However, it should be pointed out that members of the country’s Diaspora are under no obligation to place part of their savings in such a product. They are likely to participate only if the mechanism offers strong legal protections, competitive returns, appropriate liquidity, regular reporting, and full transparency on how the funds are used. The biggest challenge to the success of such an initiative is therefore that of confidence.

Currently, Cameroon is actively exploring plans to raise CFAF 2 trillion (about USD 3.4 billion) over a 10-year period from its Diaspora to support national infrastructure and economic development. This is a laudable initiative as it will help boost the country’s economic development efforts. However, there are some issues which the government of Cameroon will have to address before it invites the Diaspora to be part of its development agenda. Critics and members of the Diaspora point out that institutional hurdles such the government’s failure to recognize dual nationality, lack of transparency in government affairs, and bureaucratic delays complicate efforts to convert informal family support into long-term state investments. The government has to seduce the Diaspora and there must be some trade-offs. The Diaspora holds a lot of sway, and it does not only come with remittances, it also comes with value and capacity.

Converting informal family support into long-term state investments

Remittances can be channeled to boost a country’s collective prosperity by shifting their use from immediate consumption to productive economic investments. While remittances are highly effective at reducing immediate household poverty, their fragmented nature implies that they often miss out on driving structural national growth.To transform individual family support into broader community and economic development, Cameroon can implement strategies across financial, public, and entrepreneurial sectors. It should also be underscored that the ability to translate remittances into positive economic benefits is conditioned upon the quality of institutions the country possesses.

1. Financial Inclusion and Mobilization

Formalizing the flow of money brings the country’s unbanked citizens into the financial system, therebymultiplying the economic impact of every dollar remitted to Cameroon.

•          Remittance-Linked Savings and Credit: Cameroon banks can offer specialized savings accounts for recipients, using a history of regular remittance inflows as an alternative credit score to qualify families for small business or housing loans.

•          Diaspora Bonds: The government of Cameroon can issue sovereign bonds targeted directly at nationals abroad. This allows migrants to invest their savings securely into large-scale national infrastructure projects (like highways, schools, or clean energy) while earning a return.

•          Mobile Money Ecosystems: Expanding digital wallets reduces transaction costs, keeping more wealth within the local economy and making it easier to instantly route funds into formal financial instruments.

2. Productive Investment and Entrepreneurship

Providing the tools and frameworks to turn personal transfers into community-level capital ventures.

•          Matching Funds: The Cameroon government or development agencies in the country can match every dollar contributed by Diaspora hometown associations for local community projects (e.g., building clinics, improving irrigation, or paving roads).

•          Diaspora Venture Capital & Crowd funding: Creating structured platforms where migrants can pool their resources to invest directly in local startups, small and medium enterprises (SMEs), or agricultural cooperatives.

•          Entrepreneurship Training: Pairing financial inflows with business management training for recipients ensures that small businesses funded by remittances remain sustainable and create local jobs.

3. Incentives and Policy Frameworks

Lowering the barriers to formal financial channels while encouraging long-term wealth retention.

•          Reducing Transaction Costs: Aligning with global goals (like the UN Sustainable Development Goals target of below 3%) leaves billions more dollars in the hands of receiving families each year.

•          Tax Incentives: Offering tax exemptions on duties for imported capital goods, machinery, or technology when used to start a local business funded by Diaspora capital.

•          Flexible Dual-Currency Accounts in Cameroon: Allowing recipients or senders to hold foreign currency accounts locally, protecting their wealth against domestic inflation while keeping the liquidity within the national banking system.

•          Facilitating the Opening of Diaspora Accounts in Cameroon: The Cameroon government can create a framework that will enable the Diaspora to set up bank accounts with designated local banks without the usual hurdles which make it hard for the Diaspora to remit huge amounts of money for investment purposes. By facilitating the setting up of such accounts, many members of the country’s Diaspora will be motivated to invest back home.

The Cameroon government and the country’s economy stand to gain if the government improves its relationship with the Diaspora. By recognizing dual nationality, the government will be stretching an olive branch to the Diaspora which has lost confidence in the government. Similarly, by involving credible members of the Diaspora in government actions affecting the Diaspora and in certain institutions of the republic like the Senate and Parliament, members of the country’s Diaspora will develop interest in the country and that will help boost confidence in the government of Cameroon.

By Dr Joachim Arrey

Note: The author of this text is a staff member of the African Development Bank Group and has been living out of the country for three decades. Opinions expressed in this document are his and are in no way those of the institution he works for. The information is based on online research. He can be contacted at: arreyjoachim@hotmail.com or arreyeta@gmail.com.