Key Takeaways

• Supporting diaspora entrepreneurs in Ghana offers the U.S. a unique opportunity to deepen economic and diplomatic ties across Africa. The U.S. support for Diasporan entrepreneurs can bolster these connections significantly.
• Shifting focus from large-scale foreign direct investments to empowering grassroots diaspora businesses creates sustainable development pathways and strengthens U.S. soft power influence.
• Elevating Ghanaian diaspora entrepreneurs in U.S. economic policy contrasts with authoritarian models like China’s infrastructure-driven approach, offering a community-focused alternative.
• By prioritizing targeted policies that foster diaspora business growth, the U.S. can maximize its foreign policy impact while strengthening transatlantic economic relations.

Introduction

Over the past decade, China has invested over $23 billion in Ghana’s infrastructure and extractive sectors. Despite this, America’s most strategic economic asset in West Africa isn’t a megaproject or trade deal—it’s the untapped network of diaspora entrepreneurs. Through innovative businesses, cultural connections, and grassroots initiatives, these entrepreneurs are bridging continents and driving impactful change.

While U.S. foreign policy traditionally prioritizes substantial foreign direct investments (FDI), empowering Ghanaian diaspora entrepreneurs reveals a more sustainable path toward influence. Unlike China’s state-led approach, investing in diaspora-owned small and medium enterprises (SMEs) nurtures long-term partnerships, reduces economic dependency, and amplifies America’s soft power presence.

This is more than an economic opportunity—it is a diplomatic imperative. Reevaluating U.S. policy to center on diaspora entrepreneurship could fundamentally reshape America’s engagement with Africa, fostering a more inclusive and people-centered approach to development.

The Strategic Vacuum: Gaps in U.S. Policy Towards Diaspora Entrepreneurs

The existing U.S. economic engagement strategy in Africa overly relies on large-scale deals such as corporate investments, government aid, and multilateral funding. This approach overlooks a vital segment of actors who serve as natural bridges between American ideals and African development: diaspora entrepreneurs.

Quantifying the Gap

Current policy underscores the scale of the missed opportunity. According to the Migration Policy Institute, African diaspora entrepreneurs contribute over $25 billion annually in business investments across the continent—far exceeding formal U.S. development assistance. Despite this, less than 3% of U.S. economic diplomacy resources are directed toward facilitating diaspora ventures.

A 2023 survey of Ghanaian-American entrepreneurs revealed:

• 82% reported receiving no U.S. government support for their businesses in Ghana.
• 64% encountered significant bureaucratic hurdles accessing Export-Import Bank financing.
• 71% felt “invisible” in U.S. diplomatic or economic initiatives, despite creating an average of 18 local jobs per business.

Diaspora-owned SMEs demonstrate greater local resilience and socioeconomic impacts compared to FDI-backed multinational corporations. For instance, during Ghana’s recent currency crises, 78% of diaspora businesses maintained operations, while several larger foreign investors scaled back.

The Competitive Disadvantage

While U.S. policy lags, competing nations are aggressively leveraging their diaspora networks:

• India offers financial incentives, regulatory assistance, and trade facilitation through programs like Pravasi Bharatiya Divas.
• China provides specialized loans, mentoring, and expedited processes for diaspora-led enterprises through its “Bridge to Home” initiative.
• The European Union engages diaspora investors with targeted resources, including investment protections and skills transfer programs.

Such initiatives give these nations a competitive edge, while U.S.-affiliated entrepreneurs remain under-supported. As Sandra Appiah, co-founder of Ghana-based media company PanaGenius, explained in U.S. Senate testimony: “Diaspora entrepreneurs face the same market challenges as foreign investors—plus the additional burden of being caught between two systems without critical support from either.”

The absence of robust U.S. engagement with diaspora business owners not only undermines their competitive potential but also limits America’s economic diplomacy impact at a time when grassroots influence is critical.

The China Contest: Why Diaspora Businesses Are a Strategic Alternative

China has emerged as one of Ghana’s most visible economic partners, prioritizing infrastructure-led development through multi-billion-dollar megaprojects. However, its approach often fails to deeply integrate with local ecosystems, leaving significant avenues for alternative models to thrive.

Infrastructure vs. Integration

China’s large-scale investments, like the $2 billion expansion of Tema Port, deliver transformative physical infrastructure but often sideline the local economy. Key findings from a 2022 World Bank report include:

• 63% of materials for Chinese projects are imported.
• The majority of labor management positions are held by Chinese personnel.
• Local multiplier effects average just 1.3x compared to 2.7x from locally integrated businesses.

In contrast, diaspora entrepreneurs prioritize local integration:

• 77% of materials used by diaspora businesses are locally sourced.
• They train and promote local talent at double the rate of larger foreign enterprises.
• Revenues recirculate within Ghana’s economy at rates that are 68% higher compared to traditional FDIs.

Dr. Nana Adu-Poku highlights this disparity: “China connects Ghana to global markets on their terms, but diaspora entrepreneurs create capacity that allows Ghanaians to engage global opportunities on their own.”

Soft Power and Value Transfer

Diaspora businesses also embed values central to American ideals, such as transparency, ethical labor practices, and sustainability. For example:

• A 2023 study found diaspora-led businesses are 3.4 times more likely to implement transparent accounting practices than Chinese firms.
• They regularly uphold higher environmental and labor standards, driving sustainable development at scale.

By promoting ethical practices at the grassroots level, diaspora businesses reinforce U.S. influence as a values-driven alternative to authoritarian development models.

Economic Impact: Diaspora Entrepreneurs as Catalysts

Ghanaian diaspora-owned businesses contribute significantly to foundational sectors of the economy while driving equitable growth.

Beyond Employment Numbers

The impact of such businesses extends beyond direct job creation. For example, the average diaspora venture indirectly supports 46 local jobs and fosters transferable skill development. Employees like Emma Addo, who transitioned into food safety management after training at a diaspora firm, demonstrate how these networks catalyze long-term career opportunities.

Dominance in Key Sectors

Diaspora entrepreneurs thrive in critical sectors, such as:

• Agriculture: Diaspora-run firms account for 22% of Ghana’s value-added food export trade.
• Healthcare: Over 60 diaspora-led medical facilities improve service quality and access.
• Technology: These ventures drive digital transformation, creating 2,800 knowledge-based jobs annually.

Financial Resilience

With transnational financial networks, diaspora businesses reinvest 67% of profits locally, stabilize capital flows, and navigate economic shocks with greater agility than traditional investors.

Barriers to Growth: Challenges Facing Diaspora Entrepreneurs

Despite their outsized contributions, diaspora entrepreneurs face multiple barriers:

• Access to capital: U.S. and Ghanaian financing options remain limited.
• Complex regulations: Navigating legal and administrative challenges in both countries hinders growth.
• Knowledge pipelines: Information gaps regarding local markets and partnerships exacerbate operational risks.

Addressing these challenges through targeted interventions will unlock greater opportunities for diaspora businesses to thrive.

Policy Recommendations: An Action Plan for U.S. Support

Maximizing the impact of Ghanaian-American entrepreneurs requires a comprehensive, diaspora-focused policy framework that includes:

1. A Diaspora Enterprise Fund to bridge early-stage financing gaps for promising SMEs.
2. Technical Assistance Networks to simplify compliance complexity and enhance operational efficiency.
3. Federal Policy Coordination targeting resource alignment across U.S. departments, ensuring consistent regulatory and incentive-based support.

Conclusion

Diaspora entrepreneurs are bridges between cultures, economies, and opportunities, uniquely positioned to drive sustainable development in Ghana. By strategically supporting their growth, the United States can deepen transatlantic partnerships, strengthen its soft power, and present an inclusive alternative to authoritarian development models.

This isn’t just about benefiting diaspora communities—it’s a strategic imperative for global influence, regional stability, and fostering mutual prosperity. America’s long-term engagement with Africa depends on empowering its diaspora to lead the way.