UN Development Programme announces new project to aid Somalia's economy

UN Development Programme announces new project to aid Somalia's economy

Aiming to help rebuild Somalia's economy, devastated by years of civil strife and crisis, the United Nations Development Programme (UNDP) today announced a new project which will assist the country's authorities in rebuilding financial institutions.

Economic shocks to Somalia include inflation and a ban on import of its livestock by Gulf States, according to UNDP. In addition, the closure last October of the main money transfer company has caused a downturn in the level of remittances sent to the country from abroad. These factors, combined with other conditions including natural disasters and drought, have been exacerbated by Somalia's lack of formal banking and financial services.

The project will work to immediately establish systems to legitimize financial remittance services offered by the Somali money transfer companies, eventually bringing them under internationally established banking rules and regulations. It will also provide for statistical work and household surveys that could help the Somali authorities, the private sector and development agencies in planning their activities.

"This is an important project which has far-reaching consequences for economic development in Somalia," said Andrea Tamagnini, UNDP's Somalia Country Director. "Most people think countries in special circumstances like Somalia only require humanitarian aid, but development projects like this one can play a major role in setting the basis for longer-term economic and social recovery."

The UN Population Fund (UNFPA) has pledged $100,000 in support of the project, which has received $30,000 in initial start-up funds from UNDP.