Somalia Remittances

Millions of people in the Horn of Africa nation Somalia rely on money sent from their relatives and friends abroad in order to survive. These remittances have been the lifeline for many in a country that is struggling to recover from its failed state status after two decades of civil war and conflict. But it is feared that a decision by Barclays Bank to close the accounts of some of the biggest Somali money transfer firms, will have a devastating effect on the country and its people.

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Mohammed Mahamud started small when he moved back from South Africa and setup his clothing and cosmetics shop in the capital Mogadishu. Over a few months he has been able to expand and increase his business thanks to his family members who use money transfer firms to send money every month to invest in his business.

Dahabshiil helps us in many ways, for me to buy goods and commodities from Dubai I have to put my money in a bank account, Dahabshiil allows us to have a bank account. Dahabshiil helps us alot.” Says Mohamed.

Across the capital new businesses, hotels and restaurants have sprouted in almost every corner of the city; financially, as a result of money being sent back to Somalia from the Diaspora, but in large part, following the relative peace that now prevails in Mogadishu resulting to the  revival of  business, culture, and development.

The country now has an elected president and an internationally recognized government that is working to rebuild systems and provide services that were non-existent for over two decades since the collapse of the Siad Barre regime in 1991. It was during this long period of chaos, with no formal institutions to send and receive money, that Somalia’s money transfer firms emerged as a lifeline for many in the country.

According to the United Nations Development Programme (UNDP) an estimated $1.6 billion US dollars is sent back annually by Somalis living in Europe and North America. NGOs also working in the country have had to rely on the same transfer companies to send money to run their programs on the ground in Somalia. The bank says it’s decisions to close the accounts of the approx. 250 money transfer businesses worldwide, including that of the Somalia’s biggest transfer company Dahabshiil, is over concerns of money laundering and the potential heavy fines Barclays could face. Dahabshiil has sought an injunction to stop Barclays bank from shutting it down and a verdict from the high court is expected within days.

“I feel bad Dahabshiil Shouldn’t be closed down, because a lot of people’s livelihood depend on it, they don’t have anything and they are dying of hunger, and what people send is very little money and it’s not worth much in Mogadishu.” Says Ahmed Shariff, Somali resident. “When relatives send little money like $20, $25 and $50 they use it for coffee, if they were to stop that little money for coffee then Somali’s will suffer.”

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Qarad Bahi Noor another resident adds, “Its in within the interest of the Somali community is that Dahabshiil should not to be closed, Why? Because for example they send a mother who might a have a child who’s blind, deaf or disabled money through Dahabshiil, which is picked up for her and taken to her house which otherwise she would not have received it any other way.”

Emerging from the war and chaos of the last 20 years, Somalia stands to be the most affected if Barclays’ decision comes into effect. Its fledgling government still has a long way to go in providing basic services for its people and re-building structures and institutions destroyed by the years of fighting. In a recent statement, Somali President Hassan Sheikh Mohamud said that this is not the time to punish Somalis again by closing the legitimate lifeline on which millions of Somalis depend. He said innocent millions should not be made to suffer because of the crimes of the guilty few.