The United Nations Humanitarian Coordinator for Somalia, Randolph Kent, says the country may be on the brink of economic collapse.
Mr. Kent told reporters that, just as some degree of political stability is returning to Somalia, the economy in that east African country is in perilous condition. He said that, while the interim transitional government in Somalia is making progress toward ending violence among warring factions, a combination of factors is hurting the economy.
Mr. Kent said a decision by Gulf nations to ban imports of Somali livestock is a serious blow, and the recent closure of remittance firms in Somalia has caused additional problems. The livestock ban is because of outbreaks of the Riff Valley Fever virus among Somali livestock, and the remittance firm closures were ordered after allegations the firms had links to terrorist organizations.
The U.N. official says the Riff Valley Fever problem can be controlled through vaccination and monitoring. Monitoring, he said, can also be used in the case of the remittance firms that process payments from expatriate Somalis around the world. "The issue of remittances, the essential link between the Diaspora, the Somalis outside the country, and those in the country could be readily resolved by greater monitoring of the flow of transactions, and by trying to increase the capacity of banking systems in Somalia."
Mr. Kent said the Somali economy is also suffering from hyper-inflation with the value of the local currency dropping by about 200 percent in the past year.
The United Nations recently launched an emergency appeal for $83 million dollars to finance humanitarian and development programs in Somalia.