Somalia's Banking Isolation Hurting Economy, Central Bank Chief Warns

This creates a nested structure that adds cost, delay, and complexity.”

He added that the consequences extend beyond Somalia, harming the transparency and integrity of the global financial system.

The scale of the distortion is evident in the numbers. Somalia receives around $4.2 billion in inflows annually, $1 billion in aid and $3.2 billion in remittances. With intermediary charges averaging a conservative 5 percent, an estimated $210 million is lost each year in fees, funds that could otherwise support energy development, infrastructure projects, or climate resilience initiatives.

A similar pattern is seen in trade. Although Somalia imported an estimated $9.2 billion worth of goods in 2024, less than one-third of these imports were financed through the banking sector. The remainder was handled by money transfer operators or informal channels, which are both more expensive and less transparent. With direct settlement channels in place, a significantly larger share of trade could flow through regulated banks and payment systems.

“This is not a story of lack of capacity,” Abdullahi emphasized, “but of progress that has been overlooked.”

He stressed that Somalia is not seeking exemptions or looser standards.

“Somalia has the road map, the reforms, and the readiness. What it needs now is reconnection. Banks trusted by DFIs (Development Finance Institutions) and international NGOs (Non-governmental Organizations) can become the financial arteries of the Horn of Africa, helping to finance Somalia’s development while shaping one of the world’s most ambitious transformations.”

He added that the benefits extend well beyond Somalia’s borders: “It is in the interest of the global banking community to turn today’s leakage into tomorrow’s leverage.”