By Esse Halane
The inauguration of President Joe Biden in the US and upcoming elections on 8 February present a welcome opportunity for Somalia and its Western partners to rethink their relations.
Since the outbreak of civil war in 1991, Somalia has been seen by many as a place of bloody internecine fighting and mass poverty. That portrait is far from today’s reality. In recent years, much of Somalia has lifted itself out of the ruins of conflict and gone through a period of economic growth. Yet many international partners continue to see Somalia through an outdated lens and believe they have the answers to its problems.
Without local expertise and knowledge, these initiatives are bound to fail, much as they have in other post-conflict states in which theory has clashed with reality. Somali’s unique context demands a level of understanding that only Somalis can provide. Any proposed solution that does not take this into account is, at best, incomplete. It is the Somali people who will lose out as a result.
A case in point is the introduction of Know-Your-Customer (KYC) checks in 2016. These require anyone who wants to open a bank account to verify their identity and may well be crucial for Somalia as it develops its commercial and regulatory landscape. For now, however, they demand a set of conditions that Somalia cannot meet. As all Somalis know – but what many non-Somalis may be less aware of – is that only a small number of people in the country possess any form of identification. Somalia has one of the lowest birth-registration rates in world at just 3%, and very few people own passports or national ID cards. A better system is no doubt needed, but this will require trustworthy authorities and will be a complex endeavour that will take time.
While the absence of Somali voices in international decision-making can be counter-productive, the converse is also true. In recent years, we have witnessed several homegrown solutions to local challenges. Perhaps the greatest success has been the mass adoption of mobile money, which over 70% of Somalis over the age of 16 use. To put that in context, that’s virtually the same rate as in neighbouring Kenya, a pioneer of mobile money platforms, and nearly double Nigeria’s 40%.
One upshot of this development has been far greater economic stability. According to the World Bank, the adoption of mobile money has precipitated the creation of jobs, a steep rise in local investment, and a narrowing of the gender gap. An estimated $2.7 billion of mobile money transactions take place every month. This contributed to Somalia’s 2.9% economic growth in 2019 and to the African Development Bank’s projections of 3.2% growth in 2020 and 3.5% in 2021.
This period of robust economic growth, which to many would have seemed impossible just a few years ago, has lifted a many Somalis out of the depths of poverty and, with them, entire communities almost broken by years of hardship. The high penetration of mobile money has given aid organisations and civil societies a means to reach internally displaced people, of which Somalia has one of the highest populations in the world. Isolated rural communities can now be reached for the first time. Businesses are growing.
Of course, there is a long way to go. We need to overcome some of the remaining obstacles to wider access of financial services to the most impoverished. And, given our historically nomadic way of life, we need to make sure that those in even the most difficult-to-reach parts of Somalia have access to the resources they need to improve their lives. We need to integrate innovation into the traditional banking system in order to better serve our population’s unique personal and economic needs. But we have made a promising start, and Somali innovation –founded on a rich understanding of specific local challenges and needs – will continue to drive development in the coming years.
As the COVID-19 pandemic escalates, the development of Somalia becomes increasingly pressing. In the years to come, people around the world will be dragging themselves out of the ruins of the global economy. Now is the time to take the steps to mitigate the initial damage and plant the seeds for a swift recovery. With the Biden-Harris administration, we have an opportunity to redefine the relationship between our great nations and find a way to work in partnership as equals, and for everyone’s sake. And for that to happen, we must talk. Our international partners must work with the Somali business community and national government to address the challenges. Only then will we find a uniquely Somali way forward.
Professor Esse M Halane is the Deputy Managing Director of the Somali Chamber of Commerce, the country’s only trade organization, representing industries from telecommunications and fisheries to agriculture and aviation.
The views expressed in the article are solely the opinion of the writer. The veracity of any claims made are the responsibility of the author not Wargeyska Jamhuriyadda.
The article was originally published on African Arguments Website.
