Somalia's Banking Sector and Economic Growth

 The Mogadishu-based Heritage Institute published in June 2023 a report titled "Transforming Somalia's Banking Sector to Ignite Economic Growth: Status and Ways Forward" by Uweis Ali.

This report examines the state of the banking sector in Somalia with a focus on key bottlenecks to transforming the sector and offers policy options to address them.  

World Bank Supports Somali Remittance Flows

The World Bank published on 10 June 2016 a press release titled "World Bank Makes Progress to Support Remittance Flows to Somalia." After many banks closed the accounts of Somali remittance companies due to concerns about money laundering and potential links to terrorism, the World Bank began working with the Central Bank of Somalia to create a "Trusted Agent" to help supervise the money transfer business.

Somalia, Money Transfers, and Al-Shabaab

Foreign Policy published on 26 February 2015 an article titled "Transfer Denied: The Hidden Costs of Washington's War against Al-Shabaab" by Jamila Trindle.

Drawing on conversations with the Somali-American community in Columbus, Ohio, this article discusses the downside of U.S. policy aimed at minimizing the possibility that money from the Somali disapora might reach al-Shabaab in Somalia.  While the United States government does not prohibit money transfers to Somalia, American banks are worried about the possibility of violating sanctions and incurring large fines should the money being transferred fall into the hands of al-Shabaab.  Hence, they are taking the risk free approach of ending the transfers.   

Al-Shabaab Threat against Mall of America

Foreign Policy published on 23 February 2015 a commentary titled "Al-Shabaab Threat against Mall of America Could Be a Call to Action" by David Francis. 

The article discusses the possibility of an attack by al-Shabaab on shopping malls in the United States.  The piece treats the recent decision by Merchants Bank of California to end the handling of remittances from the Somali diaspora as a counterterrorism success without noting the damage it does to the Somali economy and the potentially greater problems it could pose for countering terrorism.

Western Union in Somaliland

Foreign Policy magazine published on 25 August 2014 a long article titled "Franchise Opportunity: Western Union in Somaliland" by Michela Wrong who has written several books dealing with Africa.

The author looks at the money transfer business and the impact on Somaliland and the Horn of Africa if Barclays gets out of the business. 

Somali Remittances

There have been a series of recent articles on the subject of Somali remittances.  Africa in Fact, the journal of Good Governance Africa, published on 1 April 2014 a piece titled "From Mogadishu to Minneapolis, And Back" by Brian Klaas, a scholar at Oxford University.

The Rift Valley Institute in Nairobi, Kenya, published in March 2014 an analysis titled "Challenges for the Somali Money Transfer Sector" by Anna Lindley and Jason Mosley. 

The London-based Africa Research Institute (ARI) published on 27 January 2014 a piece titled "Somali Remittances: 10 Things You Need to Know" by Hannah Gibson, policy researcher at ARI.  It is also available in French.

The Africa Research Institute published on 14 February 2014 an article titled "Somali Remittances Update: Banking Up the Wrong Tree" by Edward Paice, director of ARI.

Somali Remittance Update

Africa Research Institute (ARI) published on 17 January 2014 a piece titled "Somali Money Matters -- An Update on the Remittances Saga" by Edward Paice, director of the ARI.  This article provides an update on the announcement by Barclays last year that it intended to close the bank accounts of all but 19 of its 165 clients in the remittance transfer business. 

The Somali Diaspora in Support of Relief and Development

Chatham House in London published a summary of a discussion titled Cash and Compassion: The Role of the Somali Diaspora in Relief, Development and Peace-building on 7 March 2012. The principal researchers were Laura Hammond, senior lecturer, Development Studies, School of Oriental and African Studies, and Ibrahim Dagane Ali, senior technical advisor and agriculture/food security and livelihoods specialist. Click here to read the report.

The authors concluded that the Somali diaspora is a success story. The Somali economy is thriving despite the absence of the state. The diaspora has been heavily involved in humanitarian relief of Somalia. Remittances constitute between $1.3 and $2 billion annually. This includes money transferred to individuals, families, private investment and development. The support is quick, efficient, trusted and effective.