Every year, members of the Somali diaspora send approximately $1.4b to their family, relatives, and friends in Somalia, exceeding all humanitarian and development assistance to the country. The remittances comprise around 25 percent.
Somalia’s annual overseas development assistance is estimated at $1.3bn.
Funds transfers from overseas citizens back into their home country play a very important role in countries like Somalia, where a large number of its citizens fled to the outside world, especially to the West, following the collapse of the state. These transfers help recipient families pay for their monthly basis needs such as food, water, education, and healthcare. It also helps families get access to credit. Sometimes, it helps many Somalis survive recurring droughts.
This money—usually small monthly contributions taken directly from working Somalis in the diaspora—is nothing short of a lifeline for the Somali people.
But what is less understood is how that money, the diaspora remittances, can contribute towards inequality among Somali communities, and which regions in the country receive more than others.
Yet only an estimated 40 percent of the population receives remittances. For these households, monthly remittance receipts range from $50 to more than $300, with an overall monthly average income from remittances of $229.
A report by the Rift Valley Institute, a non-profit organisation operating in Eastern and Central Africa, shows the relationship between remittances and the relative vulnerability of certain communities, and how remittances can contribute towards inequality.
According to the report, there is a clear link between the average levels of remittances, and the regions in which they are received. Regions in the north, Somaliland and Puntland, receive on average $254 per month, while regions in the south of the country, excluding the capital city, Mogadishu and the port city of Kismayo, receive $119; a significantly lower monthly total.
Populations who do not benefit from remittances are disproportionately found in the south, where there is a larger rural population, and where marginalised and ethnic minority groups are mainly found.
There is also a clear link between the distribution of remittances and dimensions of migration. The Somalis, who out-migrated first, predominantly came from the north of the country, particularly from Somaliland and Puntland. These diaspora populations are now well-established in the United States and Western Europe. These patterns have been further entrenched by subsequent migration, which is facilitated by remittance transfers from existing migrant communities in host countries and other formal processes, including family reunification programmes.
The rebellion in Somaliland (now a self-declared republic) against the government of President Siyad Barre, in the late 1980s, led to a mass exodus to foreign countries, especially to the US and the UK, before the rest of the country followed suit after the collapse of Barre’s government in 1991.
This regional inequality was considered an important factor in how the dynamics of the Somalia famine of 2011 developed, with remittance-receiving communities being less vulnerable to famine.
Clan dominance and socio-economic profile of particular clans also affect how remittances are distributed.
The 2017 drought and associated humanitarian crisis showed how Somali clans demonstrated contrasting abilities to mobilise external support and, by implication, levels of resilience.
The large and dominant clans, as well as the small but well-connected ones, were able to raise funds abroad due to their historical migration patterns and the size of their current diaspora populations.
However, clans that are agro-pastoralists and whose communal identity is based on a combination of family-lineage and land-based territory responded to the drought less successfully.
Clans whose family structures are looser and who historically have had a less prominent national political profile, and whose diaspora is smaller, raised comparatively little money from abroad.
Despite playing a crucial role in Somalia’s economy and helping families meet their basic needs, remittances do contribute to inequality.