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Cultural diversity and economic growth in Africa

Jan 8, 2020, 12:44 PM

In an era of globalisation and liberalisation of goods and services, there has been surge inflows of the population in the form of temporary and permanent migration all over the world. Due to immigration there has been increase in cultural assimilation and cultural diffusion leading to cultural diversity among nations receiving them.

Article one in UNESCO Declaration on Cultural Diversity defines cultural diversity as ‘Diverse forms of culture across time and space which is embodied in the uniqueness and plurality of the identities of the groups and societies making up humankind and is a source of exchange, innovation and creativity.’

Many researchers view that cultural diversity has positive impact on economic growth and development. Article by Alejandro Martinez in provoke weekly publications indicated that 80% of states with a high Gross Domestic Product Per Capita have more than 50% diversity (ESRI Diversity Index, which is the likelihood that two people from the same region belong to a different race or ethnic group).

Economists Quamrul Ashraf of Williams College and Oded Galor of Brown University in their study found that the interplay between cultural assimilation and cultural diffusion plays an important role in economic development across the globe. Their study suggested that cultural diversity and geographic openness matter significantly to economic development.

Some of areas that benefit from cultural diversification due to migration include hospitality-food, travel and tourism, research, innovation, entrepreneurship etc. Cultural diversity leads to diverse workforce. A diverse workforce would lead to different skills and mindsets, increased understanding and knowledge, creativity, generation of new ideas which in turn lead to business, technological and cultural innovation.  In addition, global linkages increase as culturally diverse staff, particularly migrant workers, may have international connections aiding the flow of labour, goods and services.

Cultural diversity also enhances diversity and competitiveness of economy as most of migrants belong to youth population.

Richness of resources and expanding markets has made many African countries an important destination of immigration in post globalized era. Rwanda is one of African countries attracting people due to emerging opportunities in business and liberal policies. Over past few years population of Rwandan economy has become very vibrant. Rwanda is receiving immigrants from all over the world. Major drivers of migration among highly skilled labour include soaring education, IT and engineering services demand in Rwanda.

Among African countries immigrants have been contributing considerably to the growth of many African nations. It has been boosting employment in the country and also raising the income per capita. In addition, immigrants have a positive impact on the government’s fiscal balance, mostly because they tend to pay more in taxes.

Financial services demand is main driver of migration in South Africa.

A Guest Editorial