The World Bank has identified remittances as one of the biggest contributors fueling the economic growth of Somalia.
At a forum on Thursday to update the Somali government, private sector and other stakeholders, John Randa, an official of the World Bank said the Somali economy has been on a steady rise but there is still so much to be done for the citizenry to see improvements in their daily lives.
“Somalia is consuming more than it can produce, which is not very good at this point,” Randa noted.”But that should not mean that there is nothing positive to say of the country’s economy.
There has been tremendous growth over the last five years and our projection of the next five years looks very good,” added Randa as he stated that the country’s GDP stood at USD 6.2 billion and a five percent nominal growth.
Randa acknowledged the contribution, among them job creation, played by the Private Sector including Dahabshiil in the Somali economy. He however noted that there is room for them to contribute further to increase revenue.
Singling out the role of remittances Randa noted “Remittances remain a lifeline to the economy. The diaspora has played a pivotal role through their remittances, which have in turn helped Somalis”. Remittances were especially vital during the extended drought that had so many negative effects across the Somali regions.
Hugh Riddle, Country Representative for the World Bank also echoed these sentiments recognising the different roles played by the stakeholders including the private sector in growing the country’s economy.
Present and former government ministers, the private sector and other stakeholders attended the forum held at the Stanley Hotel, Nairobi. It was pointed out that service delivery in Somalia remains poor because of insufficient money in the economy. A substantial budget is allocated to security and administration services. On the other hand not enough goes to provision of services like healthcare and building of roads and tapping of water resources.
Abdirashid Duale, CEO of Dahabshiil, one ofAfrica’s largest money transfer companies, who was present at the invitation of the World Bank lauded the commitment of the World Bank and other international finance institutions for contributing to the growth of Somali’s economy. “We are encouraged with what the World Bank is doing to promote investment, said Duale whose company has played a pivotal role in remittances and other financial services of the economy.
Duale said he appreciates every effort the government and the World Bank is doing to build the country’s economy and create employment and investment opportunities for the youth. Mr. Duale added that the private sector have played an important role in the economy of the country and Dahabshiil is ready to play a bigger role to increase growth of the Somali economy. Somali minister for fisheries Abdirahman Mohammed Abdi Hashi said the government has practical measures to build the economy and increase domestic revenue.
“The government is doing its best to meet the needs of the population,” he said. The minister added: “We want to create an environment that is conducive for private sector to thrive and one of that will ensure there is security in the country” “If the economy grows, the private sector will thrive and Somalis in diaspora will come back home and invest here,” he said. He however said the biggest challenge remains how to raise revenue and at the same time be accountable to the citizenry and ensuring there is no corruption.
The initiative to help the Somali government to collect tax and also to encourage the people to pay tax was welcomed by the attendees. It was also pointed out that it is important for the government to also fulfill its responsibility to provide services and an enabling environment for businesses to function.