Somaliland is significantly dependent on remittances from its 2 million diasporas. This thesis analyzes the impact of remittances on economic recovery, welfare, and political governance in a territory that lacks international recognition and institutional assistance. The study used a qualitative single-case design, integrating five semi-structured interviews with senders, recipients, and a hawala officer, alongside scholarly and Somaliland government materials. The analysis employs thematic coding interpreted through the New Economics of Labour Migration (NELM) and social capital theory. Findings indicate that remittances reduce urban poverty, fund 50% of new small businesses, stabilize the trade deficit, and support one-third of government expenditure via customs revenues. They also finance community schools, hospitals, and inter-clan infrastructure, so reinforcing local trust but at times exacerbating clan disparities. Reliance on international banking channels, however, renders incomes and prices vulnerable to external shocks. Therefore, this thesis advocates for transparent diaspora-state trust funds and the spread of rural mobile money to enhance benefits and mitigate systemic risk and vulnerability.