HARGEISA, (SLpost)- The international Somali diaspora can help to stimulate the region through remittance finance, according to the CEO of Africa’s largest remittance company.
Speaking at the second annual Somaliland Diaspora Agency (SDA) conference – ‘Diaspora Investment in Somaliland’- held on 17th July in Hargeisa, Somaliland, Abdirashid Duale, CEO of Dahabsiiil said:
“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.”
According to 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 $1.6 – $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. However, the SDA conference largely focussed on the investment opportunities available to the Somali diaspora.
During his speech, Mr 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.
Mr Duale added:
“Diaspora investments should target small industries that use local raw materials and export generating industries and industries that can reduce imports.
In recognition of the important role played by the diaspora in fuelling economic and social development, Mr Duale also stated Dahabshiil’s intentions to collaborate with the International Fund for Agricultural Development (IFAD). Dahabshiil, 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 in 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 over 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). The SDA event follows on from the 2012 Annual Meetings of the Boards of Governors of the African Development Bank Group – a conference to discuss how best to fuel economic development in Africa – which was held in Tanzania earlier this year.
Courtesy: Africa Business