Unwavered by COVID-19, Somali Diaspora Maintain Remittance Flows
Anyone familiar with Somalia understands how important the network of diaspora is to fellow citizens in the country.
For the many families back home, the money shared by their relatives abroad provides them with a critical lifeline.
“Without it we wouldn’t be able to cover our most basic needs,” says Abdullahi Yusuf, a retired man from Mogadishu that depends on the 500 USD sent by his children abroad every month.
The financial support provided by Somali migrants is astonishing, with an estimated 1.4 billion USD remitted in 2018. This is equivalent to 25 percent of Somalia’s GDP, and outpaces international aid and foreign direct investment, according to the Somalia National Development Plan 2020–2024.
The level of financial contribution of those abroad is of course understandable considering the lack of opportunities in the country which continues to force hundreds of people to leave each year. The high youth unemployment rate in Somalia — estimated at 17% in 2019 according to UNDP — coupled with a fragile national economy and nearly three decades of conflict, has left a large part of the population without a stable and secure income.
There are about two million Somalis living outside the country, mostly in African countries although most remittances come from diaspora living in Europe, the United States and Canada.
COVID-19 Impact on Remittances
Since the onset of COVID-19, remittance flows declined by an estimated 1.6 percent globally and in Sub-Saharan Africa, they increase by roughly 2.3 per cent (excluding Nigeria).
But despite the positive projections, the socio-economic repercussions of COVID-19 were strongly felt in Somalia. IOM conducted a snapshot between June and July 2020 to analyze the socio-economic impact of COVID-19 on the Somali diaspora living in Finland, the Netherlands, Sweden and the US.
IOM found a decrease of 61 per cent in 2020, the equivalent to USD 289. For recipients, the impact of this decline could make the difference between sending children to school and being unable to do so.
Saida Ahmed, a 35-year-old from rural Somalia knows it very well. She is one of the estimated 40 per cent of families that rely on remittances from their relatives living abroad.
“Without this financial support, it would be difficult to feed this big family. It would be impossible for my children to continue their education and get medical care when needed.” Saida used to receive over 1,000 USD per month from her husband and relatives abroad, and since March this amount has declined to only 400 USD.
The survey also examined the impact on remittance recipients, diaspora organisations, money transfer operators, and key government institutions connected with diaspora affairs in Somalia.
The study revealed that 67 percent 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 6 million people in the country who rely on this source of income.
“We’ve seen that the main socio-economic impact on remittance recipients is food-insecurity and not meeting basic needs such as rent, utilities, school fees, medical expenses and other household expenses — which has also exacerbated their financial stress,” said Sikhulile Dhlamini, IOM Somalia’s Labour Mobility and Human Development Specialist.
The Department of Diaspora Affairs at the Ministry of Foreign Affairs and International Cooperation in the Federal Government of Somalia has noted a decline in remittances based on reports received and consultations held with a number of mobile transfer operators.
Diaspora Organisations that are normally involved in charity initiatives in Somalia have also seen a significant change in the activities of their members.
“Despite the increase in social media activity, the organisations have experienced a sharp decline in donations as a result of the pandemic,” Adan Said, speaking on behalf of Ranan Org, which is based in Finland.
“We felt helpless to deliver the aid to those in need on time because of these restrictions.”
But this decrease does not tell the whole story. 97 percent of respondents are committed to breaking these new barriers to allow them to support their families back home, be it with reduced amounts.
“My family and relatives are still in dire need of support and therefore I still have to send money regardless of the tough situation that I am right now.” Says Aisha Mohamed, a 51-year-old who arrived in Sweden almost 25 years ago from Puntland fleeing from war. “I have started to work more nightshifts at my work to find some sort of solution.”
The IOM survey sheds light on the situation for Somali migrants in the US and Finland, who faced a decline in their ability to send remittances (63 per cent and 70 per cent respectively) due to movement restrictions, the unavailability of MTOs, high charges, and limits on the amount of money that can be sent. This differs from Somali migrants in Sweden and the Netherlands who reported maintaining their level of remittances at 90 per cent and 70 per cent respectively.
In response to the current situation, the Somali government’s preparedness and response plan for COVID-19 emphasizes the need to facilitate to sustain households that rely on such inflows as their main source of income. This followed acknowledgment that any reductions in remittances will directly affect household-level income and overall food security.
*Names in this story have been changed to protect the identity of the individuals quoted.
For additional information, please contact IOM Somalia Programme Support Unit: iomsomaliapsu@iom.int
