On a recent warm evening, Eritrean-born Afeworki Bein got busy serving beer, coffee and food as a long line of customers snaked insight Snelling Café, which he’s owned and operated since 2003.
When Bein, who immigrated to the United States 28 years ago, first opened his business in St. Paul, he only served coffee and soft drinks. But once he noted the increasing immigrant population in the Hamline-Midway neighborhood 10 years ago, he expanded the space and added new items to the menu.
“There were not these many people here,” said Bein, comparing the current African immigrant population in the Twin Cities to that in the ‘80s and ‘90s. “There were a few … and I knew them all.”
The neighborhood has now blossomed into a business hub for African immigrants in the Twin Cities, a home to thousands of immigrants and refugees, may of them from Ethiopia, Eritrea, Cameroon, Liberia, Nigeria and Somalia.
Bruce Corrie, an economics professor at Concordia University in St. Paul, has been studying the economic growth of these communities for years.
In his latest “The Economic Potential of African Immigrants in Minnesota” report, Corrie unveiled the growing entrepreneurship and economic boom of African immigrants in Minnesota as well as the obstacles they’re facing in their pursuit of entrepreneurial success.
The community generates an estimated $1.6 billion in income purchasing power each year, according to the report. In the Twin Cities metro area alone, African immigrants spend an annual $800 million purchasing groceries, electronics, furniture and healthcare, among other things.
Funded by the McKnight Foundation, the report pulls information from more than 600 customer and business surveys, which Corrie and his team conducted in the Twin Cities, Brooklyn Park and Brooklyn Center.
“The consumer and business surveys indicate that there is a sizeable market for ethic products,” stated the report, which was published in May. “For example, African immigrants in Minnesota spend an estimated $90 million in groceries at ethnic stores.”
In an interview, Corrie added that African immigrants make nearly half a billion dollars in purchases in mainstream stores annually — and drive vitality in inner cities and rural neighborhoods.
In addition, Corrie said, African immigrants give an estimated $14 million in charity to churches and mosques in Minnesota. They also send another $150 million to assist their loved ones who live in various places in Africa.
“For the $151 million that they give in charity or they give in aid to Africa, they’re not getting any tax benefits,” he said. “It’s after-tax money that’s going overseas.”
He added that Minnesota’s African immigrants generate $200 million in state and local taxes annually.
Data by gender
The study compared male African immigrant entrepreneurs to their female counterparts and looked at their financial assets, business skills and civic involvement, among other things.
The report revealed that more women in the community own businesses than men, Corrie said. However, women reported they own less financial assets than men.
Likewise, the report stated that women appear to have more difficulty selling their business ideas compared to their male counterparts. And when it comes to licensing and regulation knowledge, Corrie wrote, men are way ahead of women.
But women are more active in civic involvement, including voting, volunteering and participating in their children’s school activities: About 65 percent of African immigrant men voted last year compared to nearly 80 percent of women.
Likewise, nearly 74 percent of African immigrant women volunteered and 64 percent participated in school activities compared to 70 percent of men who volunteered and about 56 percent who participated in school activities with their children.
The two groups, however, have one thing in common: Most of them use informal financial networks to fund their businesses, the study stated.
“The survey shows strong usage of community loan pools for financing business enterprises,” he wrote. “This is a very effective way for financing in immigrant communities.”
Still, Corrie wrote, there’s a room for improvement: “Support efforts to develop these alternative loan pools and to provide risk management tools for these loan funds.”
Inaccurate population data
Estimates from the U.S. Census Bureau of Minnesota’s African immigrant population continue to understate the actual number of the community, Corrie explained.
Between 2011 and 2013, for example, the bureau’s American Community Survey reported 23,361 to be the state’s Somali-American population. Around the same time, however, the Minnesota Department of Education reported 14,876 Somali speaking students in the K-12 school system.
Corrie added that there’s no official number of African ethnic businesses in Minnesota. “We know how many Vietnamese businesses are there,” he said. “We know how many Mexican businesses are there. But we don’t know how many Nigerian or Somali businesses are there.”
As a result, Corrie explained, the African immigrant communities are largely invisible to state and local policymakers.
Corrie recommended in the report: “Invest in community efforts to better estimate the size of their population. Engage with the Census administration to help provide better estimates of these populations.”
Corrie said he noted an alarming disconnect between public institutions and immigrant communities in Minnesota.
As he conducted the study, Corrie said he discovered the only institutions that African entrepreneurs said they’ve interacted with are folks from licensing and regulation agencies. These agencies might be the only mainstream institutions that are actually knocking at their doors, Corrie explained.
He recommended that other agencies reach out to the community in developing policies and programs that would promote ethnic entrepreneurship in the state.
“We found that cultural intelligence is needed in connecting with the communities to build relationships,” he said. “It’s an important engine for economic growth.”