Opinion: From Humanitarian Aid to Investment-Led Development: Somalia’s Path to Sustainable Growth

“Sustainable development begins when humanitarian assistance creates pathways to investment, jobs, and resilient communities.”- Said Abdirizak Ali

For decades, humanitarian assistance has been a lifeline for Somalia, helping millions survive conflict, drought, floods, displacement, and food insecurity. While emergency aid remains indispensable during times of crisis, it cannot, on its own, generate lasting economic opportunities or reduce long-term dependence on external support.

Somalia now has a unique opportunity to transition from a development model centred primarily on relief to one driven by productive investment, financial inclusion, and private sector growth. This shift does not replace humanitarian assistance; rather, it complements it by helping communities become more resilient, self-reliant, and economically productive.

Investment-led development focuses on creating sustainable livelihoods instead of providing temporary relief. It enables farmers to increase agricultural productivity, supports entrepreneurs in expanding their businesses, creates employment for young people, empowers women-owned enterprises, and strengthens local markets.

More importantly, investment builds productive assets, raises incomes, and lays the foundation for long-term economic stability.

Several sectors offer significant investment opportunities across Somalia. Agriculture and livestock—the backbone of the national economy—can benefit from modern irrigation, mechanisation, veterinary services, and stronger value chains.

Fisheries, renewable energy, affordable housing, digital finance, and small and medium-sized enterprises (SMEs) also present considerable potential to generate employment, strengthen food security, increase exports, and stimulate inclusive growth.

International and local non-governmental organisations (NGOs) continue to play a critical role in Somalia’s development. Increasingly, many are expanding beyond emergency response by supporting enterprise development, providing technical assistance, strengthening community capacity, and preparing entrepreneurs to access commercial finance.

These efforts help reduce investment risks while ensuring that vulnerable communities are not left behind.

Financial institutions are equally central to this transformation. Banks can provide Islamic finance solutions, SME financing, climate finance, agricultural and livestock loans, trade finance, and digital banking services that enable businesses to grow.

 Beyond lending, they can promote financial literacy, encourage savings, and deliver advisory services that strengthen local enterprises and improve long-term business sustainability.

The greatest impact, however, will come from stronger partnerships among government institutions, development partners, NGOs, financial institutions, and private investors. Blended finance models—combining donor grants, technical assistance, and commercial financing—can mobilise greater investment while reducing risks for both lenders and entrepreneurs.

Matching grant programmes have already demonstrated how shared financing between donors, financial institutions, and business owners can strengthen local ownership and improve project sustainability.