For decades, Somalia’s economy has relied on money wired from abroad.
The Somali diaspora is spread across North America, Europe, the Gulf, and East Africa.
They send billions of dollars home each year, keeping families afloat through drought, conflict, and political instability.
Increasingly, diaspora Somalis are moving beyond sending cash for daily needs and are channeling funds into start-ups, real estate, agriculture, and technology ventures.
It is a shift that economists say could reshape the country’s economic trajectory.
“We are not just sending money for food and rent anymore,” said Kosar Mohamed, a London-based accountant who co-owns a poultry farm outside Mogadishu.
“We want to build businesses that employ people and make a profit.”
The Somali remittance system – valued at an estimated $1.3–$2 billion annually has been the backbone of household income for years, according to the World Bank.
The informal money transfer companies known as hawalas have been the bridge between Somalia and its global diaspora because formal banking is limited.
During crises – from the 2011 famine to recurring droughts – this flow of cash has meant the difference between survival and destitution for millions.
Now, however, Somali entrepreneurs abroad are leveraging their earnings to set up enterprises back home.
In Mogadishu, the capital’s skyline has changed, dotted with hotels, shopping malls, and office towers funded by diaspora investors.
In the agricultural heartlands, irrigation projects and commercial farms are benefiting from the same shift.
A recent study by the Heritage Institute for Policy Studies found that while 70% of remittances still go to household expenses, nearly 20% are now invested in income-generating projects, a proportion that has doubled in the last decade.
The pivot is not without risks. Somalia’s fragile security environment, weak legal frameworks, and fluctuating currency rates deter many would-be investors.
Cases of mismanagement and corruption in joint ventures have also soured some.
“Trust is the biggest currency,” said Abdi Hussein, a Minneapolis-based engineer who invested in a fishing company in Kismayo.
“You have to find partners who are honest and know the local market. Without that, you lose everything.”
Mohamed Hilow, a Horn of Africa analyst, believes diaspora-led investment could help diversify Somalia’s economy away from aid dependency.
“By creating jobs and fostering private sector growth, they argue, these ventures have the potential to strengthen state revenues and spur broader development,” he said.
For many in the diaspora, the drive is both economic and deeply personal.
Mr Hilow said that if the trend persists, Somalia’s future will be financed through investments aimed at building lasting prosperity, shifting away from remittances sent purely for survival.
