Oxfam is joining over 100 NGOs, activists and academics to raise the alarm and call for
action in a joint brief as remittances to Somalia drop precipitously amid the COVID-19
crisis.
Nearly half of all Somali households rely on remittances to cover basic needs like food, water,
health care and education costs, but as their family members and organizations abroad struggle
to earn and send money in the COVID-19 economic downturn, this vital lifeline is now being cut.
This is part of a reported 20% global decrease in remittances, as recently estimated by the
World Bank.
Somali money transfer operators (MTOs) report that remittances have already dropped
substantially since the onset of COVID-19, due to economic pressures on members of the
Somali diaspora. As unemployment and underemployment figures soar in the US and
elsewhere, including in the Somali diaspora, that economic crunch is then being felt in Somali
households that depend on regular payments from their families abroad, just as they need it
most. As women are increasing having to stay home to care for sick family members and
children out of school remittances are often the only funds that female caregivers are able to
access and control, making them a vital tool for women’s economic empowerment.
In countries where no salary compensation schemes are in place – like the Gulf countries –
these economic losses are being felt even more acutely. The social safety net in the US has
proven to be weak or nonexistent to many communities, particularly those made up of
immigrants, and those in more informal jobs.
“The majority of Somalis are out of work, so people are having difficulties sending money,” says
Ubah Haji Mahammed, a Somali woman who has been living in the UK since the 1980s. “A lot
of people, like bus drivers, are shutting their shops – even those who are working in permanent
positions, are only getting paid 80%.” She is worried about people in Somalia getting food and
says that “people are panicking.” A family member in Somalia was telling Ubah that his money
will not last as long as the food prices are rising.
Not only do many Somali diaspora have less money to send, but many are still unable to send
home even the reduced amounts they can afford due to preexisting and prohibitive banking
restrictions. The aggressive approach of governments, particularly the United States, has left
banks unwilling or unable to shoulder the risk to support MTOs who are sending money to what
are deemed “high risk” places. Regulations which do have important intentions, have had
unintended consequences, and have Somali families as collateral damage. Oxfam has called on
governments to address these barriers in the past, and now their failure to act has exacerbated
this crisis.
Oxfam and the co-signers give recommendations to the US and European governments, the
international banking sector, Somali MTOs and more. Specifically, Oxfam calls for the US
Treasury Department and banking agencies to facilitate emergency transfers from the US, and
to finally take action to encourage banks to help Somalis send money home.
Scott Paul, Oxfam America’s Humanitarian Policy Lead, said, “Across the US and around the
globe, Somalis are working hard to support their families back home. Sadly, many have fewer
resources to share today, and because of the US government’s irresponsible approach to bank
regulation, banks have been scared away from helping Somalis send what they can. Now more
than ever, the Treasury Department in the US and governments elsewhere need to take urgent
action so Somali families can pay for rent, food, medicine and school fees as COVID-19
spreads.”
Of course, families should not have to rely on international payments from family alone,
especially in the midst of a global health crisis. State-run cash and voucher programs, feeding
programs for vulnerable children and provision of health and water services to the most
vulnerable are key measures to protect Somali communities – not only in times of COVID-19.
“The COVID-19 crisis is laying bare and exacerbating inequalities and serves as a reminder that
too many among us are living on the brink”, says Amjad Ali, Oxfam in Somalia/Somaliland’s
Country Director, “We now need to see leaders step up to support vulnerable communities with
the social protection they need and deserve, while also easing the way for families to support
each other through hard work and remittance payments.”
The decline in remittances and its disastrous effects on vulnerable Somali communities comes
at a time when there are other ongoing crises, which taken together could lead to famine,
according to the UN’s World Food Programme. The UN estimates that in 2020, 4.1 million
Somalis are food insecure, 2.6 million are internally displaced and over a third do not have
enough water to cover their daily needs.
The global pandemic is hitting Somalia as an additional layer of challenge, as it already faces
extreme climate crises like droughts, flash floods, locust infestations that are predicted to return
20 times worse than before. All of this is in the context of ongoing conflicts between
government, clan actors and insurgent groups.
