"Diaspora investment is vital to the functioning of the private sector, fostering job creation and up-skilling. Diaspora-led businesses, not only in Somaliland but the whole of Africa, play a crucial role in bringing expertise and investment to the private sector."
According to DFID, approximately 80 per cent of start-up capital for Somali businesses is funded from remittances. Diaspora groups have demonstrated vast potential for fostering regional development and enhancing the resilience of fragile communities. An estimated $1.6 - $2bn is remitted to Somali territories by the diaspora every year.
Globally, money sent home by migrants constitutes the second largest financial inflow to developing countries - a vital source of income that outweighs donor aid. Remittance income is particularly important for communities in more remote regions, and helps to bolster the funding of humanitarian organisations operating in those locations. However, the SDA conference largely focussed on the investment opportunities available to the Somali diaspora.
During his speech, Mr Duale highlighted the need for the Somali diaspora to invest in infrastructure development and regional trade. He also praised the diaspora's willingness to invest in what many regard as fragile markets.
Mr Duale added:
"Diaspora investments should target small industries that use local raw materials and export generating industries and industries that can reduce imports.
"Dahabshiil is working with diaspora communities to encourage infrastructure development across all Somali territories. We have provided loans for start-up capital and have been involved in some very notable business and construction projects. If Somali territories are to be developed further, then its business community - domestic and international - must play a central role. Somalis have shown themselves to be capable of remarkable innovation and enterprise, however their aptitude for business and trade can only be fully realised if there is the proper infrastructure in place to harness it."
In recognition of the important role played by the diaspora in fuelling economic and social development, Mr Duale also stated Dahabshiil's intentions to collaborate with the International Fund for Agricultural Development (IFAD). Dahabshiil, the largest private sector employer in the Somali region, plans to work with IFAD to leverage the contributions of diaspora communities and encourage economic sufficiency through investment in sustainable agriculture - particularly in rural areas in Somalia. The aim is to boost social entrepreneurship and increase access to markets for diaspora members.
The 'Diaspora Investment in Somaliland' conference was attended by over 300 members of the diaspora from across the business community, government and international stakeholders. Attendees included representatives from Coca Cola, US Aid and the International Organization for Migration (IOM). The SDA event follows on from the 2012 Annual Meetings of the Boards of Governors of the African Development Bank Group - a conference to discuss how best to fuel economic development in Africa - which was held in Tanzania earlier this year.
SOURCE Africa Business