Diasporas, Remittances and Africa South of the Sahara: A Strategic Assessment

This research paper chapter examines the negative dimensions of diaspora networking, specifically how migrants can facilitate organized crime, money laundering, and the financing of terrorism and armed struggles in Africa south of the Sahara. It analyzes the prevalence of informal remittance systems, the specific case of Nigerian criminal syndicates, and the socio-political drivers of xenophobia and immigration restrictions.

• Diaspora networks can be exploited to finance terrorism and armed conflicts. Examples include the Tamil diaspora providing approximately US$50 million annually to the Liberation Tigers (LTTE), and the international support for Hamas exceeding US$100 million per year. The document notes that the LTTE has used the African continent as a route for money transfers, with organizations in South Africa such as the Tamil Rehabilitation Organisation (TRO) in Durban collecting funds.
• Informal remittance systems are widely preferred over formal banking due to lower costs, speed, and a lack of trust in state institutions, but they facilitate money laundering and criminal activity. In Senegal, only 16% of remittances from 'modou-modou' migrants use Western Union. In Somalia, 'hawilad' companies move money through Jeddah and Dubai using personal trust (amaano), often without physical cash transfers, making the funds impossible to trace.
• Nigerian diaspora networks are heavily associated with organized crime, specifically prostitution, drug trafficking, and '419' advance fee fraud. Nigeria has become a major global purveyor of narcotics, supplying one-third of heroin seized in the US and over half of the cocaine imported by South Africa. The '419' scams are estimated to have earned criminals US$500 million in 2001, with some estimates suggesting a total of US$7 billion since 1985.
• Remittances often fail to drive productive economic development in home countries, instead funding ostentatious consumption or survival. In Lesotho, the pressure to remit money for cattle or housing prevents migrants from saving for investment, resulting in only 1% of Basotho mine-workers in South Africa owning business enterprises. In Cape Verde, the private sector is largely owned by former civil servants rather than the diaspora.
• Strict immigration and containment policies in developed and developing nations often inadvertently fuel criminal networks. These policies force migrants into hiding and create markets for human smuggling. For example, Somalis use various fraudulent methods to circumvent Schengen regulations to enter Europe. In Africa, the deportation of immigrants has disrupted domestic economies, such as the drop in cocoa production in Ghana following the 1969 expulsion of Nigerians.
• Fragile or 'failed' states may rent out their sovereignty or territory to criminal interests to compensate for lost remittance income. The Comores has previously helped South Africa and Iran circumvent sanctions and negotiated a US$5 million contract to store toxic waste. Additionally, offshore banking facilities on the islands of Anjouan and Mohéli are noted as concerns for money laundering.

APA

de Montclos, M.-A. P. (2005). Diasporas, Remittances and Africa South of the Sahara: A Strategic Assessment. Institute for Security Studies. https://issafrica.org/topics/conflict-prevention-and-analysis/20-may-2008-iss-feature-xenophobia-in-south-africa/01-mar-2005-monograph-no-112-diasporas-remittances-and-africa-south-of-the-sahara.-a-strategic-assessment-marc-antoine-perouse-de-montclos/chapter-3

Chicago

de Montclos, Marc-Antoine Pérouse. Diasporas, Remittances and Africa South of the Sahara: A Strategic Assessment. Institute for Security Studies, 2005. https://issafrica.org/topics/conflict-prevention-and-analysis/20-may-2008-iss-feature-xenophobia-in-south-africa/01-mar-2005-monograph-no-112-diasporas-remittances-and-africa-south-of-the-sahara.-a-strategic-assessment-marc-antoine-perouse-de-montclos/chapter-3.

Wikipedia

{{cite report |last1=de Montclos |first1=Marc-Antoine Pérouse |title=Diasporas, Remittances and Africa South of the Sahara: A Strategic Assessment |publisher=Institute for Security Studies |date=1 March 2005 |url=https://issafrica.org/topics/conflict-prevention-and-analysis/20-may-2008-iss-feature-xenophobia-in-south-africa/01-mar-2005-monograph-no-112-diasporas-remittances-and-africa-south-of-the-sahara.-a-strategic-assessment-marc-antoine-perouse-de-montclos/chapter-3 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{demontclos2005diasporas, author = {de Montclos, Marc-Antoine Pérouse}, title = {{Diasporas, Remittances and Africa South of the Sahara: A Strategic Assessment}}, institution = {Institute for Security Studies}, year = {2005}, month = mar, url = {https://issafrica.org/topics/conflict-prevention-and-analysis/20-may-2008-iss-feature-xenophobia-in-south-africa/01-mar-2005-monograph-no-112-diasporas-remittances-and-africa-south-of-the-sahara.-a-strategic-assessment-marc-antoine-perouse-de-montclos/chapter-3}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }