Remittances part of solution to Somalia’s woes

Shortly after the horrific Garissa massacre in April, the Kenyan authorities suspended licences of remittance companies, including my firm Dahabshiil — which operates in 126 countries, 40 of which are in Africa.

We are delighted the Kenyan Government has restored our licence. Remittances help reduce poverty by enabling people to help their loved ones pay for food, shelter, medicine, education and other basic necessities.

The funds are also used for investment in business, agriculture, construction and other sectors, 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, Somalia has a government recognised widely across the world. Another key factor in the improved situation in Somalia has been the contribution of its dynamic private sector.

Security in Somalia is in a much better state than it was four years ago. With the help of the international community, including the Kenya Defence Forces, the Somali authorities have succeeded in dislodging Al-Shabaab from most parts of the country.

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.

DESPERATE TO REBUILD

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.

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 a devastating conflict or famine.

Now that there is a true glimmer of hope for Somalia, legitimate, compliant and fully regulated licensed 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. It is only a small number of Somalis who take part in terrorism, and not all terrorists in the region are Somalis.

Al-Shabaab has recruits from different countries in the region, indeed the world. It is wrong to label all Somalis terrorists. If responsible money transfer companies 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.

SAME CHALLENGES

Recently some small new Somalia-based financial institutions, with one or two branches in Mogadishu, have announced they have a solution to the problem.

No matter what financial institution tries to work in Somalia it will, in all likelihood, face the same challenges: embryonic institutions and an evolving regulatory environment require us to be even more diligent than elsewhere.

But it would be counter-productive to punish Somalia’s financial sector when the country is finally beginning to recover from decades of conflict.

This would be the case for Western companies, as well as regional and Somali ones. 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 companies like Dahabshiil is to allow healthy competition. This drives down the often exorbitant prices charged by the global remittance giants.

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. We are dedicated to being part of the Somali solution.

The writer is CEO, Dahabshiil Group