Hiiraan Online
Wednesday, April 8, 2015
MOGADISHU (HOL) ----In an attempt to keep Somalia's lifeline working, Somali government leaders appealed a coordinated international effort to protect Somali remittances facing imminent closures after international banks that handled their international money wires terminated their contracts and shut down their accounts.
The development comes after the Somali Hawala companies that filled the gaps of proper banking system in the absence of central government have come under scrutiny in the past few years for potentially laundering money or funding terrorism. In response, banks have been closing their accounts.
"Remittances are a critical lifeline to millions in poverty and famine-stricken Somalia. Shutting this down, they argued, would only compound the misery of a population cowed by terrorism," said a joint statement by Somali president Hassan Sheikh Mohamud and his prime minister Omar Abdirashid Sharmarke.
"Indeed, such measures were in their view counterproductive as they would have the effect of driving legitimate and financial flows deeper underground into the murky, costly and ungovernable realm of illicit finance." They said.
The Somali leaders' appeal remarks comes few hours after the Kenyan government has closed dozens of Hawala companies it accused of funding terrorism after a deadly university in northeastern Kenya that killed at least 147 people this week.
They expressed dismay at the development, warning it would inevitably constitute a triple penalty to Somalia's efforts to return to a responsible and accountable member of the international community.
Both leaders challenged the decision to close down banks in the US handling Somali remittances as the wrong approach to addressing the problem of, for example money laundering.
""The focus should be just as much on the flows out of rather than into Somalia as we are probably experiencing net losses. We will need to work with our international partners to retain our resources and pursue our stolen assets". They said.
The two leaders called for support for a new initiative to launch a multi-agency Special Task Force on Remittances (STFR) to support efforts to protect Somali remittances. They said the initiative would have the mandate of coordinating and accelerating FGS policy and actions to address interests with respect to remittances in the context of formalizing the Somali financial sector to create a sustainable solution and a national financial infrastructure geared for growth.
The composition of its membership of Government institutions, Private Banks and Remittances sectors will be announced soon.
It's unclear if the new pro-hawala front would change the current status of which the companies face imminent closures that may adversely affect millions of Somalis who are financially dependent on their relatives abroad.
Somali remittance companies deliver hundreds of millions into the horn of Africa each month, including funds for aid agencies supporting the poor people in the impoverished horn of Africa nation.