By Keynan Jama
Every year, Somalis abroad send home more money than the federal government spends. In 2023, remittances reached about USD 1.7 billion—more than the federal budget that year and more than the USD 1.1 billion received by aid agencies. The 2025 federal budget was USD 1.34 billion. Remittances equal roughly one-sixth of Somalia’s economy, and about four in ten households receive them.
For decades we called this a lifeline. That word now feels too small. A lifeline is thrown once; whether it lands is the whole story. What happens next is changing—from survival to strategy, from family support to community investment.
Where the money is going
Writing in Kenya’s The Star, Bashir Abdille traced how Somali diaspora finance, with Dahabshiil as a central example, has moved through stages. Money still pays school fees, medical bills, and food. But diaspora resources also support telecommunications, financial services, energy, and property.
Abdille argues more could flow into agriculture, technology, housing, education, healthcare, and infrastructure. This is no longer only survival money; it is longer-term capital.
Stories that show the shift
Consider Amina, a nurse in Minneapolis. For fifteen years she sent $300–400 a month to her mother in Mogadishu for food, medicine, and school uniforms. In 2022, she and three cousins pooled savings and bought a small plot outside the city. They built a modest apartment block. Rents now cover the original family support and generate income for a second building. Amina still sends money—but part of it now supports a lasting local asset.
Amina’s story is not isolated. Across the Horn and the Gulf, diaspora resources have helped build private universities, cold-storage facilities, and mobile-money agents that reach villages banks ignore. The pattern is consistent: people who know the local market, trust local networks, and plan to remain connected are directing money into assets that last longer than a monthly transfer.
Why this matters
The people sending money know the market, trust local systems, and want their hometowns strong in two decades, not just this month. Diaspora resources are patient, informed, and committed. They already function like patient capital; they simply move through family and community ties rather than formal contracts.
This support has rewritten parts of Somalia’s economic map. Telecom companies seeded by diaspora resources now connect millions. Real-estate developments in Hargeisa, Garowe, and Mogadishu have been financed by relatives abroad. Energy projects—from solar mini-grids to generator networks—increasingly involve diaspora participants.
Why infrastructure is the missing foundation
Private activity without reliable infrastructure is structurally incomplete. Individual businesses can succeed, but they struggle to scale, reach wider markets, or deliver productivity gains.
Somalia’s gaps remain severe. Electricity reaches roughly half the population, with lower rates outside major cities. Most power comes from fragmented private diesel mini-grids. Tariffs often run between $0.40 and $1.00 per kilowatt-hour—several times the African average—and supply is unreliable. Firms absorb high generator and fuel costs or limit output.
Roads tell the same story. Of roughly 21,800 kilometres, only about 13 percent are paved, and most paved sections have deteriorated past their design life. Journeys between major cities can take days. Seasonal flooding cuts routes. Transport costs rise, supply chains fracture, and markets stay small and local. Ports face congestion and high fees; cold-chain storage is scarce. Goods spoil, prices stay high, and expansion becomes prohibitively expensive.
These constraints place a ceiling on what private resources can achieve. A well-run clinic or factory still faces steep costs and limited reach if diesel is the only dependable power and moving products costs more than the products themselves. Diaspora participants can support solar systems, apartment blocks, or small logistics ventures. They cannot alone rebuild trunk roads, transmission networks, or port capacity that would let those activities multiply.
Long-term infrastructure deficits require deliberate, coordinated effort. Public investment, clearer regulation, public-private partnerships, and sustained external support are necessary. Diaspora resources can and should play a larger role in energy, housing, and logistics. But the foundational networks that lower costs for everyone remain a shared national task. Until they improve, even the most patient private resources will deliver less than they could.
The missing option
Today a Somali in Manchester, Minneapolis, or Melbourne who wants to direct resources home has two routes: send cash to a relative, or do nothing. There is no widely available, regulated, transparent structure for participating in longer-term local projects with clear information on how resources are used and how they perform.
That third route does not yet exist at scale. Building it would not be only a government task. Regulators can set rules; diaspora families, local business owners, and communities would decide what is useful. Any future arrangements would be shaped by the questions people ask: How is information shared? Who is responsible? How are outcomes reported? What protections exist?
We want to hear from you
Are you part of the Somali diaspora? Do you send money home? We are interested in your views on how remittances and diaspora resources work, and what information or structures would be useful. We are running a short anonymous survey for research purposes. It takes about four minutes. Your answers are anonymous unless you leave an email to be contacted. Full details are on the below survey’s .
Important notice
This article and the survey are research only. They are not an offer, invitation, or solicitation to invest. No investment product, security, or financial instrument is being offered, promoted, or discussed as available. Nothing here constitutes financial, investment, or legal advice. Any future opportunity would be communicated only through channels permitted under the laws of your country of residence, including the United States, the United Kingdom, and European Union member states.
Keynan Jama
Email: keynanj123@gmail.com
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Sources
- Remittances 2023: The New Humanitarian, 30 September 2025; OCHA 2023 Somalia humanitarian dashboard.
- Federal budget 2025: Council of Ministers approval, reported by AllAfrica, October 2024.
- Remittances as share of GDP: World Bank, 11 February 2025.
- Household reach: Rift Valley Institute, 2018.
- Sector shift: Bashir Abdille, The Star (Kenya), 16 August 2026.
- Infrastructure constraints: World Bank, IEA Somalia, AfDB, National Transformation Plan 2025–2029.