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Remittances have played a key role in both economic growth and stability, particularly in Somaliland but also more widely in Somalia over the last 20 years. Remittances are estimated to account for 50% of Somalia's gross national income and to support up to 40% of the population, or 3.8 million people. Exact figures cannot be determined due to the lack of supervision and regulation of the sector in Somalia, however, Somali "Money Transfer Organisations" (MTOs) are estimated to handle US$2 billion annually in remittances from worldwide sources. It is further estimated that $500 million of remittances are sent to Somaliland per year.
Remittances are therefore crucial to a large number of individuals' livelihoods and to the overall stability of the country. Studies have, however, also found that remittances in Somalia can discourage job-seeking as individuals have chosen to rely on remittances for their livelihoods, rather than work in local jobs. Due to commercial banks' recent decisions to close the majority of MTO accounts in the UK, DFID is working closely with Her Majesty's Treasury and the Foreign and Commonwealth Office to assess the situation and facilitate dialogue between industry stakeholders to try to ensure transfers to Somalia and elsewhere remain possible.