ANALYSIS
By Abdirashid Duale
Shortly after the April 2 Garissa University College massacre, the authorities suspended the licences of all remittance firms, including my company, Dahabshiil.
Dahabshiil is a global company, operating in 126 countries, 40 of which are in Africa. It complies fully with all international regulations. It is only our operations in Kenya that have been affected by the licence suspension. We are serving millions of customers from every corner of the globe.
The President’s announcement on Thursday that he had asked the Central Bank of Kenya to allow 13 remittance companies to resume in Kenya is welcome news indeed. Although of course we are fully regulated, we are more than happy to make any changes if required by the Central Bank.
Remittances not only help reduce poverty by enabling people to help their loved ones pay for food, shelter, medicine, education and other basic necessities. The funds are invested in business, agriculture, construction, promoting development and creating jobs.
For remittance firms that work in Somalia, it is striking how much the country has changed in recent years. For the first time in more than two decades, it has a government recognised across the world, including by the United Nations, United States and European Union. A sure sign of how much the situation has improved was US Secretary of State John Kerry’s recent trip to Mogadishu, the first ever visit by a US Secretary of State. And with US President Barack Obama coming next month to Kenya and Ethiopia, who knows if he, like Kerry, will make a quick stop in Somalia.
Other countries are also heavily involved in the reconstruction of Somalia, including Turkey, Qatar and the UAE. Ministers from Igad recently held their regional meeting in Mogadishu.
Another key factor in the improved situation in Somalia has been the contribution of the contribution of its dynamic private sector, including Dahabshiil. It has helped rebuild the country, create jobs, provide investment funds and has, through its corporate social responsibility activities, supported health, education and sports.
Security in Somalia is in a much better state than it was four years ago. With the help if the international community, including the Kenyan military, al Shabaab has been pushed out of most parts of the country, including the main towns and cities. Pirates no longer rule the seas, and the devastating famine of 2011 is over.
Ironically, it is at this time of real improvement and hope for Somalia, that it is becoming more difficult to send remittances to the country. During Somalia’s worst of times, including the periods of control by clan militias, warlords and terrorists, there were no obstacles to remitting funds there. Now that most of the country is in the hands of an internationally recognised and legitimate government, the situation is becoming more difficult.
Surely now is the time to help the Somali people get back on their feet, and there is no better way than enabling lifeline and investment funds to reach those desperate to rebuild their country, and make sure it never falls back into devastating conflict or famine. Now that there is a true glimmer of hope for Somalia, legitimate, compliant and fully regulated licenced remittance companies should be able to take part in its reconstruction and development. This is the way to build lasting peace.
The vast majority of Somalis want peace, and a better, more prosperous future for their country. And like these Somalis, Dahabshiil is on the side of peace. It wants to help turn Somalia around into a functioning, stable and secure country that can play its part in the region and the world.
Only a small number of Somalis engage in terrorism, and not all terrorists in the region are Somalis. It has recruits from different countries, indeed the world. It is wrong to label all Somalis as terrorists; it is as if they have been found guilty even before they have been put on trial. The same can be said for Somali companies. Our company, Dahabshiil, can only thrive in a peaceful Somalia and a peaceful Kenya, and we will do what we can to contribute towards that peace.
If responsible money transfer companies like Dahabshiil are restricted from operating globally, some money will continue to trickle through to Somalia. But it will do so via underground, illegitimate channels. Some of these routes will in all likelihood be linked to terrorism and criminal enterprises. Also, if honest, hardworking Somalis cannot help each other by sending money through legitimate companies, they might be pushed towards radicalisation. This cannot be the answer. It will simply prolong and deepen the Somali crisis.
If remittance companies are prevented from operating what will be next? Will phone companies that allow calls to Somalia be shut down? Will airlines that fly to Somalia be prevented from doing so? Will it become impossible to send food, medicine and other necessities to Somalia? Where will this end?
Recently, some small new Somalia-based financial institutions, with one or two branches in Mogadishu, have announced they have a solution to the problem. Whilst we welcome competition, and we would like nothing more than international banks coming to Somalia operating in every remote area, we do not believe that any of them have genuinely found a workable solution, be it through biometric equipment or some other method. No matter what financial institution tries to work in Somalia, it will in all likelihood, face the same challenges. This would be the case for Western companies, as well as regional and Somali ones. Anyone who claims they have a method of solving the problem is not in touch with reality and is insincere.
We have all our systems in place, and we are happy to make any further changes asked of us. But Somalia is not Singapore. Somalia is not Switzerland. All the stakeholders need to come together in an honest and transparent way to address the unique challenges.
The benefit of a company like Dahabshiil is it allows for healthy competition in all the countries it operates. It helps drive down the often exorbitant prices charged by the remittance giants, even though their prices remain higher than ours. If Dahabshiil withdraws from the market, prices will go up and there is more likely to be a monopoly. Also, the economy of the country will be affected, people in remote areas won’t be able to access funds, and jobs will be lost, both for those who work directly for my company and who obtain work indirectly because of remittances.
The business environment in Somalia, including the remittance industry, has been one of its success stories. It is highly competitive, innovative, adapting and constantly changing. Any changes required by the international community will be implemented by the responsible companies.
In order to avoid any future problems, like the ones we experienced in Kenya, Dahabshiil could simply withdraw from Somalia and continue serving its many customers elsewhere in Africa, the US, Europe, the Middle East and Australia. But we are dedicated to being part of the Somali solution. We want to keep playing a crucial role in reducing poverty, stimulating development and working with the international NGOs that rely on our services.
We are committed to helping the poorest people and enabling economies to grow. We create hope. We save lives during drought and famine. We also help reduce terrorism because if people cannot receive lifeline funds, they might be pushed towards such activities.
The international community does not want remittance companies like Dahabshiil to withdraw from Somalia. I recently met British government officials in the White House, the State Department and the US Treasury. They all reiterated this message. That is why they are all working so hard to find a solution to ensure funds continue to flow in a legitimate and transparent manner.
Remittances provide far more funds than foreign aid, and they allow people to help each other. They are part of the solution, and, working with the international community, Dahabshiil wants to help lead the way for a prosperous, safe and secure Somalia and the wider region.
Abdrashid Duale is the CEO of Dahabshiil, the largest African remittance company. He is also a member of the Advisory Board of Remittance International Associations, the International Association of Money Transfer Networks.
