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Could Remittances & Overseas-Based Population Catalyze The Adoption Of Electric Vehicles In Africa? part 1

Remittances are the largest source of capital inflows into low and middle-income countries. However, unrecorded flows through informal channels are thought to be at least 50% larger than these inflows that come via official channels. In Zimbabwe for example, official Reserve Bank figures show that remittances surged from $1 billion in 2020 to $1.4 billion in 2021. Remittances represented 14.4% of the total $9.7 billion in foreign currency inflow that Zimbabwe received last year. Kumbirai Makanza gives a great overview and looks into how remittances could accelerate renewable energy investment in Africa. Could this remittance market also be an avenue to catalyze the adoption of electric vehicles in Africa?

Sales of electric vehicles are growing quite nicely in places such as the United Kingdom where there is a large population of Africans who have settled there for work. A good number of these families are now part of the EV driving community there. Last month, the market share for plugin vehicles in the UK was 16.2% of new vehicle sales.

Admire Monyadiwa, a Zimbabwean who has settled in the United Kingdom, is one of these EV drivers. Admire is a strong advocate for the adoption of electric vehicles. He is a member of several EV groups and forums in the UK and also on social media. He has been driving an EV since 2014, when he bought a Nissan Leaf which he still uses to this day. His Leaf has now done over 90,000 miles. He has since had a Tesla Model S as well as two Tesla Model 3s in that time. He recently swapped out his first Model 3 for newer version that comes with a heat pump. He has now also ordered a Model Y and is awaiting its delivery.

Admire Monyadiwa’s Nissan Leaf

Over the last couple of years, Admire has managed to convince 20 people in his network in the United Kingdom to go electric. Some of them now drive Nissan Leafs, Teslas, the Mercedes EQC, and Audi e-trons. One of his friends has managed to send a 40 kWh Nissan Leaf to his parents who are back home in Africa.

This got me thinking, as more and more people in the diaspora community go electric, it presents a big opportunity for them to raise awareness of electric vehicles when they interact with their friends and family back home. Some of the money sent back home is used to fund housing construction and business projects. Some of these business projects are in areas such as farming and in transport & logistics services.

Just like Admire’s friend sent a 40 kWh Nissan Leaf and a 7 kW charger to his parents back home, could there be a significant portion of the population in the diaspora community who could send electric vehicles back home? One option would be to send their 5- or so year-old EV back home as and when they upgrade their vehicle in the UK or wherever they have settled. They could also send some used electric vans to help run the transport and logistics services they are sponsoring back home. In several countries, such as Zimbabwe and Botswana, small city cars and family cars are used as taxis, and most of them operate informally. Over 90% of these vehicles are imported as 8- or so year-old vehicles from Japan and the UK. Could old Renault Zoes or similar join the bandwagon and offer lower operating costs given the incessant petrol price hikes recently?

Admire Monyadiwa’s Tesla Model 3

Some of the inflows that make up the billions of US dollars being sent home from overseas come in the form of regular/consistent and fixed monthly amounts to help families back home pay rentals, groceries, utility bills, school fees, medical bills, and also sponsor small business activities. Some of these small business activities include motorcycle taxi (boda bodas) and delivery services in countries in East and West Africa. Several startups in East and West Africa are now offering financing options for the nascent electric motorcycle sector. Could some of these remittances be directed to funding their family and friends back home by supporting them in acquiring or leasing these electric motorcycles? Members of the diaspora community could even pay directly to the service providers back home as they already do with other services such as utility bills, mobile phone talk time, and data packages for mobile phones.

All images courtesy of Admire Monyadiwa

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