The international Somali diaspora could help stimulate the region through remittance finance, according to the CEO of one of Africas largest remittance companies
Speaking at the second annual Somaliland Diaspora Agency (SDA) conference — 'Diaspora Investment in Somaliland' — held in Hargeisa, Somaliland, Dahabshiil CEO Abdirashid Duale commented, "Today, remittance finance is the fastest growing and most stable capital inflow to Somali territories.
"This income not only offers a vital lifeline to at-risk communities who rely on this money to survive, but it also helps to drive economic development throughout the region.
"Diaspora investment is vital to the functioning of the private sector, fostering job creation and up-skilling. Diaspora-led businesses, not only in Somaliland but the whole of Africa, play a crucial role in bringing expertise and investment to the private sector," Duale added.
According to the UK's Department for International Development (DFID), approximately 80 per cent of start-up capital for Somali businesses is funded from remittances.
Diaspora groups have demonstrated vast potential for fostering regional development and enhancing the resilience of fragile communities.
An estimated US$1.6bn-US$2bn is remitted to Somali territories by the diaspora every year.
Globally, money sent home by migrants constitutes the second largest financial inflow to developing countries – a vital source of income that outweighs donor aid.
Remittance income is particularly important for communities in more remote regions, and helps to bolster the funding of humanitarian organisations operating in those locations. The SDA conference, however, largely focussed on the investment opportunities available to the Somali diaspora.
During his speech, Duale highlighted the need for the Somali diaspora to invest in infrastructure development and regional trade. He also praised the diaspora’s willingness to invest in what many regard as fragile markets.
Duale added, "Diaspora investments should target small industries that use local raw materials and export generating industries and industries that can reduce imports.
"Dahabshiil is working with diaspora communities to encourage infrastructure development across all Somali territories. We have provided loans for start-up capital and have been involved in some very notable business and construction projects.
“If Somali territories are to be developed further, then its business community – domestic and international – must play a central role," he argued.
"Somalis have shown themselves to be capable of remarkable innovation and enterprise. Their aptitude for business and trade, however, can only be fully realised if there is the proper infrastructure is in place to harness it."
In recognition of the important role played by the diaspora in fuelling economic and social development, Duale also stated Dahabshiil's intentions to collaborate with the International Fund for Agricultural Development (IFAD).
Dahabshiil, one of the largest private sector employer in the Somali region, plans to work with IFAD to leverage the contributions of diaspora communities and encourage economic sufficiency through investment in sustainable agriculture, particularly in rural areas of Somalia. The aim is to boost social entrepreneurship and increase access to markets for diaspora members.
The ‘Diaspora Investment in Somaliland’ conference was attended by more than 300 members of the diaspora from across the business community, government and international stakeholders. Attendees included representatives from Coca Cola, US Aid and the International Organization for Migration (IOM).
