Tuesday, June 25, 2013
Somali money transfer businesses asked the British government to
stop Barclays bank from closing their accounts in Britain, a move
Somali officials and bankers said threatens remittances.
remittances are Somalia's biggest foreign currency earner and many of
its 10 million people rely on the $1.2bn or so sent to the nation every
A Somali official said on Monday cutting that "lifeline"
could hurt fragile efforts to stabilise a nation battling an Islamist
insurgency. Somalia analysts said it could encourage the use of illegal
and untraceable routes if other channels were blocked.
said in a statement it was stopping offering banking services to some
Somali transfer firms due to fears funds might end up in the hands of
"terrorists" in a nation that is slowly emerging from two decades of
"It is recognised that some money service
businesses don't have the proper checks in place to spot criminal
activity and could therefore unwittingly be facilitating money
laundering and terrorist financing," it said without naming the firms.
Central Bank Governor Abdusalam Omer told Reuters in Nairobi that
Somalis in Britain sent an estimated $500m a year in remittances, a
vital stream of funds now threatened.
"It's a lifeline. Probably
one quarter of Somalia's GDP is from remittances," he said. "There are
about 2 million people who receive some support from the diaspora and
that goes into buying food, shelter, medicine, schooling."
Mogadishu, where commercial banking disappeared in the early 1990s
after the fall of dictator Mohamed Siad Barre, firms such as Dahabshiil
fill the gap offering money transfer services used by Somalis and
international agencies sending cash.
one of Somalia's best known firms with agents in Britain and offices
in Dubai and other African states, said it had been told its Barclays
account would be closed.
Dahabshiil Chief Executive Abdirashid
Duale told Reuters that stopping remittances "sends the wrong signal
about the recovery that the country needs." He called for the US and
British authorities to step in to help reverse the decision.
than 100 Somalia-focused researchers and aid workers on Monday also
signed a letter urging Britain to work with Barclays to find a way to
work with Dahabshiil and other firms.
"This [cut in service] will
only encourage people to send funds through illegal, unsafe, and
untraceable channels, thereby potentially making the problem of support
to proscribed parties much more serious," said the letter.
Somali Money Services Association (SOMSA) said 12 of its 17
Britain-based members had lost accounts with major banks in Britain,
such as Barclays and London-based HSBC.
HSBC said it was pulling out from offering services to money transfer firms globally, adding this policy began last year.
shall not survive if Britain stops the money flowing," said Anab Mire
Hussein, a mother of nine with a snack kiosk in Mogadishu. "I live on
monthly cash from my son in London."