An economic community’s strength is often measured by how long money circulates within it before leaving. In strong, cohesive economic networks, money changes hands multiple times within the community, creating a multiplier effect that enhances local wealth, business development, and overall economic stability. The African community, both on the continent and within the diaspora, can learn from models in the Chinese, Jewish, European, and American communities, which have developed highly efficient systems of economic circulation.
For example, in the Chinese community, money typically circulates six to eight times within before it leaves. This continuous exchange supports Chinese-owned businesses, services, and industries, which in turn helps develop local economic infrastructure. In practice, this means that when a dollar enters the Chinese community, it is likely spent several times on Chinese-owned goods and services, enhancing prosperity through reinvestment and increased purchasing power.
Similarly, in Jewish communities, money often circulates four to six times within the community. These reinvestments allow for robust support of community-specific education, real estate, healthcare, and cultural institutions. Through strong support networks and an emphasis on buying within the community, Jewish communities maintain a cycle of economic growth, creating a foundation that sustains businesses and fosters wealth generation across generations.
The European and American communities also see significant economic recirculation. In the United States, for instance, studies show that money in some white American communities may circulate up to five times before leaving. This circulation benefits local economies, reinforces job creation, and contributes to community development, as these communities prioritize supporting businesses within their own networks.
In contrast, studies have shown that within African and African diaspora communities, money tends to leave the community quickly—often after only one or two exchanges. This rapid outward flow, influenced by a reliance on external businesses and services, reduces the potential for wealth building, as well as economic and cultural sustainability. For example, a dollar spent in an African American community may only circulate within the community for a matter of hours before it leaves, compared to weeks in other communities.
To strengthen the African community’s economic base, several strategic changes are essential. These include creating and supporting African-owned businesses, fostering educational and financial literacy programs, and promoting a culture of reinvestment within the community. Building a strong network of African-owned banks, schools, and healthcare services can also keep money circulating longer, creating jobs, and strengthening the community’s economic power.
Through increased community cohesion, reinvestment, and an emphasis on supporting African-owned enterprises, the African community can build a more self-sustaining economic model that promotes long-term growth, cultural pride, and financial resilience.
Comments