- Almost 70% of Somalis receiving money from relatives abroad are unemployed
- The country receives at least $1.3 billion in diaspora remittances every year
Somalia tech start-ups are banking on innovation to promote flow diaspora remittances back home to spur social economic growth.
The techies who have been one day conference held in Nairobi held on Thursday courtesy of Pangea Trust with funding from Swedish International Development Cooperation Agency said innovations especially in areas of money transfer will increase flow by 25 to 30 per cent.
The event created a platform to revolutionize the financing of start-ups, giving the diaspora the opportunity to become a major player in the ecosystem.
Speaking during the session, Pangea Trust managing director Anne Lawi said acknowledged the marked economic growth in the horn of Africa, saying proper tracking and investment of diaspora remittances will go a long way propping up the growth.
Silicon Horn co-founder Awil Osman said that there is a huge opportunity with growing tech ecosystem in Somalia and the return of diaspora to fuel the uptake of remittance as a tool of investment to start-ups in Somalia.
UNFPA Somalia Youth Fund manager Khadra Ali proposed educating the diaspora on different investment opportunities in Somalia.
“We can motivate the Somali diaspora to invest back home through having the right information to make investments to make a difference and through partnerships,’’Ali said.
The event came at the back of previous reports that have revealed that remittances act as a vital safety net for many Somalis, but there are significant differences in the amounts and frequency of transfers, as well as among recipients.
Mid last year, a study by the International Organisation for Migration (IOM) revealed that 67 per cent of Somalis receiving money from relatives abroad are unemployed.
For nearly 80 per cent of those surveyed, this amount constitutes at least half of their income and is insufficient to cover all the basic needs of a family.
This shows the fragile financial situation for the over six million people in the country who rely on this source of income.
Every year, members of the Somali diaspora send approximately $1.3 billion to their friends and relatives in Somalia, exceeding all humanitarian and development assistance to the country.