Somali Development and Reconstruction Bank pushes for private investment

Somalia is working to lift itself out of years of conflict and poverty — and that includes amping up the work of the Somali Development and Reconstruction Bank so that the country can better mobilize private sector investment. As governor of the bank, Hodan Osman is helping to spearhead that effort. During a recent Devex Pro briefing, she talked about the opportunities and challenges of investing in least-developed states. For Somalia, that means a revitalization of its Development and Reconstruction Bank propelled by recent positive trends, Osman said. “It was just great timing in the sense that once we got debt relief, Somalia was also doing better economically. We were getting into greater trade deals. We joined the East African Community. In that way, we were passing much more robust laws and regulations around investments. So it just seemed like a perfect time to then really think about, how do we look at development differently?” she said, noting the importance of development banks shifting their focus to use public funds to invest in the private sector. “Because if you look at what commercial banks are doing, not just in Somalia, but in Africa, [they’re] not going into these sectors that are really needed, because these sectors are considered highly risky and these sectors are nascent. But somebody has to go there,” she added. “Close to 65% of the world's poorest are in fragile states. So you’re literally shutting the door on the world’s most needy if you’re not willing to go into these areas and be able to take that risk, and that’s what we’re pushing them on.”