In Somaliland, investments in technology and start-ups are needed to help tackle the country’s challenges
By Ismail Axmed, Founder and chairman of WorldRemit, a cross-border digital payments company
The power of remittances, the funds migrants send ‘back home’ to family and friends, is at the centre of my story.
It’s also the story of how Somaliland, my homeland – has overcome challenges to forge its own, entrepreneurial path; a path that challenges traditional models of aid, setting an example for other developing countries.
Long before I founded WorldRemit in 2010, which is now one of the world’s largest cross-border payments companies, I saw how remittances have the power to change people’s lives.
Members of my family – like many others across Somaliland – went to work in the Arab Gulf, and the money they sent home provided critical income for us.
Back then, there was no quick, inexpensive method to send money to Somaliland.
Instead, a trader would travel from Hargeisa to the Middle East and collect cash from migrants and then use those funds to buy goods to ship to Somaliland, where the goods were resold in the local market, in effect, converting the goods back into cash and supporting the local economy.
A classically entrepreneurial solution to a very real challenge that defines the Somalilander mindset.
There is a word in Somali that sums up the character of the people that send remittances: “Sahamiye” – which translates in English as “pathfinder”.
Pathfinders forge routes that make it possible for others to prosper.
Remittances enable this pathfinding. A remittance starts with an individual who has left their family to find work, saving to send money home, helping others.
These are the people that have inspired my own journey, from fleeing war to later founding WorldRemit, with an ambition to make it faster and cheaper for pathfinders to support their families.
“Sahamiye” also captures how Somaliland has overcome challenges to forge its own path. Somaliland has been resourceful with what little it has, making progress that was never thought possible.
This self-reliance is required due to Somaliland’s status in the world. Somaliland is not a formally recognised country and does not have formal access to institutional funding from the World Bank or IMF. As a result, too many Somalilanders don’t have access to reliable healthcare or quality education.
Somaliland has responded by adopting an innovative approach to building its own institutions that are optimised for the specific challenges the country faces.
Somaliland has chosen to move away from reliance on aid that often does more harm than good.
Yet the economy has grown despite Somaliland’s challenges. Remittances have been core to the nation’s journey to self-reliance, as evidenced in the past year.
In 2020, against aid industry’s alarmist predictions, remittances to Somaliland were up by 15% from $1.1 billion to $1.3 billion, according to the Central Bank of Somaliland.
Generations of diaspora communities have taken it upon themselves to support Somaliland in its time of need.
It remains the case that innovative development finance models are required to tackle Somaliland’s challenges, generating solutions to the country’s challenges from within.
Establishing a foundation focused on Somaliland is the next stage of my journey. This gives an opportunity to give back to Somaliland and to share what I have learned.
Over the next ten years, my ambition is to be able to commit $500 million of my own wealth to Somaliland-focused development programmes, through my Sahamiye Foundation.
As with WorldRemit, I want to take an entrepreneurial approach that will bring out the best in Somaliland, investing in technology and start-ups in the country to overcome barriers to development, supporting entrepreneurs to tackle Somaliland’s challenges.
As we have seen in Somaliland, such innovative approaches have the potential to stimulate economic growth, good health and prosperity and are required if the country is to continue flourishing.
The journey of the pathfinder is never-ending, and Somaliland faces many challenges ahead. But with an entrepreneurial mindset that challenges the status quo, I believe that a bright future awaits.