Global Policy Forum

New UN Initiative Encourages Somalis Abroad to Invest in Farming Projects Back Home

The International Fund for Agricultural Development (IFAD) has announced a new initiative to encourage diaspora investment in agriculture in Somalia. The program aims to generate food and rural job security in a country where conflict, drought and high food prices have weakened the agricultural system. Somalia has suffered from severe food shortages in the past and thousands of people died in July 2011 as a result of a national food crisis. IFAD will offer a grant of $1.5 million to finance diaspora projects that hope to leverage more than $1 billion to be sent to the country annually by Somalis living abroad. The Diaspora Investment in Agriculture (DIA) initiative, which is supported by the government, estimates that the remittances will equal up to 50% of the country’s gross domestic product.

February 4, 2013

The United Nations agency tasked with supporting agricultural projects in developing countries today announced a new programme to encourage Somalis living abroad to invest in farming, improving food security and increasing rural employment in their homeland.

The International Fund for Agricultural Development (IFAD) will provide a grant worth $1.5 million to finance innovative diaspora projects. Another $1 million is expected from diaspora investment in agriculture in the first four years.

"We must harness this often-times invisible investment in agriculture, particularly in post-conflict countries and fragile States," said Kanayo F. Nwanze, President of IFAD. "Helping the diaspora invest in agriculture represents an opportunity to mobilize new resources to achieve our common goal."

Approximately four times as much is invested in agriculture through remittances than through official development assistance, according to IFAD.

Part of the Diaspora Investment in Agriculture (DIA), the initiative - supported by the Somali Government and the United States Department of State's International Diaspora Engagement Alliance (IdEA) - consists of grants ranging from $20,000 to $100,000 to allow Somalis living aboard to invest in infrastructure in their home country.

Somalia has a history of food insecurity. In July 2011, a six-month food crisis caused by low rainfall and a massive rise in food prices led to thousands of deaths and required a massive humanitarian aid programme.

While the number of Somalis in crisis was halved in the past six months, acting UN Humanitarian Coordinator for Somalia Stefano Porretti has warned that the situation remains fragile with below-average rainfall expected during the April-to-June rain season.

The launch of the agricultural project follows a recent call by Somali President Hassan Sheikh Mohamud urging the Somali diaspora to invest in the reconstruction of the Horn of Africa country.

Remittances from Somalis living abroad are estimated to equal up to 50 per cent of the country's gross domestic product (GDP), which is vital for its economy. Up to 40 per cent of remittances are sent to recipients in rural areas.

The IFAD initiative draws on projects successfully implemented in the region where security remains a problem, such as partnerships with local merchants that allow participants to pick up food at local shops instead of carrying large sums of money with them.


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