How Onerous Anti-Terrorism Policies are Undermining Somalia’s Economic Development

Somalia is home to about 10 million people, only a tiny fraction of whom are members of the al Qaeda-linked Al Shebaab terrorist group. However, policies aimed at starving al Shebaab of some of its funding sources are adversely impacting the 40% of Somalis who depend on remittences to feed, clothe, and educate their families or start a business.

Remittences to Somalia account for about $1.4 billion year. In the USA, Somalis send about $240 million to their friends and families back home every year. But now, banks are making it much harder for the diaspora to support their friends and families still living in Somalia.

Here’s the story: Somalia lacks a banking infrastructure, so the way that most Somalis send remittences is through money transfer services. A woman in Seattle could go to a shop and pay dollars that her niece in Mogadishu can pick up in shillings. But recently western banks have been systematically shutting down the accounts of these money transfer services out of concern that they could be held liable if funds end up with Al Shebaab.

This video from Shuraako, a US based non profit that supports economic development in Somalia, does a very good job explaining this dilemma.


Most American banks no longer hold accounts for Somali money transfer organizations. The UK banking giant Barclays is following suit and shutting those accounts as well.

This seems like overkill. To be sure, there is a legitimate need to prevent foreign funds from supporting al Shebaab. But a haphazard policy that effectively makes it impossible for families to send remittences runs contrary to western goals for Somalia’s economic recovery. Surely, there are policy solutions that do not entail eliminating the remittence lifeline upon which millions of Somalis depend?