afrol News, 5 January - Aiming to help rebuild Somalia's economy, devastated by years of civil strife and crisis, the United Nations Development Programme (UNDP) yesterday announced a new project which is to assist the country's transistional 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 by the US government has caused a downturn in the level of remittances sent to the country from abroad.
The closure of the money transfer company was initiated because the US government claims it had helped financing terrorist organisations. No proof has been brought forward in that direction, but poor documentation by the Somali company did not allow counterproofs. Meanwhile, the biggist sources of foreign money for Somalia has dried into a fraction of what it was.
- 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 UN yesterday noted.
According to information released by the UN agency, the new project is to 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.
The project is also to 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 US$ 100,000 in support of the project, which has received US$ 30,000 in initial start-up funds from UNDP.