by Khadar Hanan
Tuesday, February 7, 2017
When it comes to an African leader, I adulate Mr. John Magufuli of Tanzania, and when it comes to an African nation, I adore to that of Rwanda “a country that was synonymous with genocide only 22 years ago, but a beacon of peace and prosperity today”. The secret is so simple, just ‘competency’, not a miracle or magic. The out spoken orator, a typical visionary, yet a combative critique on the corruption ridden African leadership and the heartless people who are always behind such leadership on the basis of tribal and ethnicity sympathies Dr. PLO Lamumba, has time and again expressly depicted how ‘incompetency’ has sent the peoples’ layman to the top of the throne resulting in power abuse and public wealth manipulation. I solemnly confess and second that the same bunch of predators indoctrinated with much of what Dr. Lamumba demonstrated occupies a power loophole made by a long political figure, but a tired nonagenarian president, Ahmed Mohamed Mahmoud (Silanyo).
The roughly 3.5 million people that forms the unknown republic among the global nations had drastically been challenging with issues much related to the basic necessities that human should have to pursue a suitable life. We Africans, are always a part of the systems we often complain about; as what the same doctor above has labeled, “Feeling Good Effect attitude” galvanizes our moral values; feeling proud of having a corruptive politician with ethnicity affiliation(s), whilst he/she doesn’t even know you personally. It really feels like something far beyond what the average human consciousness can digest. Somali people in general are 100% a monotheistic people and belong to one religion (Islam) with no sects whatsoever; day and night we do mumble prayers towards Mecca (the holly city), but much of our actions are far beyond what we do practice. This is the reason Somalia statically rests without improvements at the bottom of the global corruption indices, as the world’s most corrupted nation on earth. I don’t have to sing longer with the gross failure we all share, but let me come down to the point, for which I have taken the keyboard.
The inflation that has faced the people of Somaliland today coupled with the prolonged rampant droughts is quite dire which could rip apart the future of a quarter of a century old social contract with no globally known unique national identity. Though, the causes of inflations are not due to monochromatic economic vehicles, this is seemingly a currency depreciation driven inflations, where the purchasing power of the national currency has exponentially lost its grip against the US dollars. Thanks to the many well educated compatriots in and around the world, who’ve unapologetically commented, analyzed and projected viable solutions to the subject matter through printed, aired and webbed media of all types. Thanks to my common people too, who’ve morally stood in solidarity with the local business corporations that play an integral role in the domestic business booming and create employment opportunities for thousands of households.
On Tuesday, January 24, 2017, a group of ministers of all echelons and what they’ve called as a national level ad-hoc committee for inflation fact findings have popped up the presidential enclave and eventually press-released several unsubstantiated, yet misleading points reached through unanimous approvals of all the attendees to lay down an exit strategy for this financial menace. And any failure to comply with such points by all the potentially concerned stakeholders would culminate a dire consequences__ like commercial license revocations, business abrogation and jail terms. The minister of the presidency has snatched the role of the president’s press secretary and stipulated on a couple of unconstitutional articles on what they have attributed to have been the root causes of the ongoing inflation and the best possible preventive and mitigation strategic measures they could deal with the inflation. I must not be biased__ the minister has in fact hinted several key factors for this inflation but diverted major actors of it to totally uncorrelated entities and services. The government has partially confused the digital payment facilities with inflation causes in an attempt to have a scapegoat for her poor economic policies. What a sophistry!
ZAAD & E-Dahab Vs. Inflation
The ongoing innovations and renovations by the global techno-societies have shifted the long conventional practices of many business natures to more sophisticated contemporary platforms. One should not forget about the global worming alarms and how development of renewable energy and cutting off the greenhouse emotions are widely argued to be a sustainable strategy to deal with this ecological impact. Today, business communications are mostly exchanged through dematerialized modes (i.e. no paper works are involved). It is simple to see the foot signature of an e-mail received from a colleague, reading like (please consider the environment before you print). However, the global financial communication systems have as well been moving towards the modernization and sophistications of its means in the best interest of serving and safeguarding both the wealth and the image of the business society. Yohoo, Hotmail and Gmail etc. are literally said to be an outdated today, owing to the speed in which the techno-renovations are going on. Our smart phones and IPads are derailing the usage of the latest computer knowhow as much of the similar services could be performed with the smart handsets.
Mobile Money Banking (MMB) is another modern mode of digital payment system, which is continuously gaining a growing momentum across the global financial and business societies. This technology has tremendously added great values to the financial communications between people and entities in terms of efficiency, security and convenience. In many modern banks across the world today corporations are enabled to manage their accounts online to move money right from their accounts to the other world or pay their employees’ wages and salaries without the intervention of the bank’s day to day operations. Notwithstanding, many predominantly cash based economic countries are pushing even harder today to adopt the cashless services to minimize the level of corruption and risk which the cash based economies often entertains. India for instance, a country of 1.2 billion strong population and one of the world’s emerging economies has recently scrapped off the 500 & 1000 national currency notes to confront billions of black money and to prosecute tax evaders, and accordingly encouraged her people to use the cashless channels. I could recall several giant service providers complaining about system issues due to the surge of human traffic who were going to switch the simple electronic mobile wallet services.
The sophistry on ZAAD and E-Dahab services as one of the major sources that have caused or somehow fueled the inflation in the Somaliland was shaky and uncensored findings. It was a complete embarrassment on the part of the government and their so called ad-hoc committee for the inflation assessments to have their hands tossed into the air, decisively reaching decisions much beyond their level of knowledge and expertise to come up with logical measures for putting better curbs on this national issue (the inflation).
On Friday, January 27, just three days after the government’s press release, fresh news on bilateral technical agreement on ZAAD services was told to have reached between the Telesom (the country’s largest service provider) and the government. A joint press release held by the minister of the presidency Mr. Mohamoud Hashi and the conglomerate CEO Mr. Abdikarem Mohamed Eid has revealed that much of what the government initially issued was hastily adopted measures, as the minister himself confessed that the government was convinced that there were certain points stipulated beyond their technical facts, directly pointing out the time frame given the service providers to execute the USD currency limit systemic deactivations. The view carefully selected words by the group CEO has in contrast given a soothing assurances to the company’s service users that the ZAAD services were remained intact with no immediate changes.
The government’s unjustified claims have shocked the public at large both professionals and the common people who have had years old, yet deep trust in these services. An economic crisis born with the basic currency demand and supply curves or in other terms, ‘a poor monitory policies’, where used as a tool to mislead the mainly droughts ridden poor people and risked the insolvency of major businesses. The printed currency notes for the unknown viable needs, coupled with the recent ban of livestock exports by the Kingdome of Saudi Arabia, that was a major source of hard currency inflows and a money-market balancer for the country and the Ethiopian green leaves’ import hard currency outflows are the major sources in which the inflation could possibly be attributed to, but the government is not even ready to turn the light on at least the later rather than the former sources categorically. The other irony was, thought these services are by the two biggest corporations in the country, Dahabsheel of E-Dahab, didn’t maintained a similar pressure on legally challenging the government’s baseless claims due to the fact that, this company enjoys a very slim percentage of the market service share in comparison with that of its competitor (Telesom). The silence of the Dahabsheel group would however, not taking off the table widely marauded conspiracies with the government to create chances where they can enhance their market share. One of the biggest ironies on this matter is the fact that the Dehabsheel Company by the blessings of the clan-power influences has its own exchange agent inside the Central Bank of the country, where the company deals with the real hard currency exchange for the government (sources).
Incompetency is what shapes many key portfolios of the government. Ms. Samsam Cabdi Aadam, a former teacher who has no financial experiences what so ever, is the minister of finance, which is constitutionally obliged to set out the country’s prudent fiscal policies and to stabilize the market economy. The Central Bank of Somaliland, which acts as the country’s financial regulator is totally paralyzed by the fact of being totally disconnected from the international financial counterparts on one hand, and the lack of government support to regulate the local financial institutions on the other. The narrative that the central bank of the country is narrowed down into a warehouse for the unwanted cash is a literal fact. It is the central bank with all the support of the government to regulate the money market and sustainably stabilize the purchasing power of the national currency, therefore, to make an intrinsic trust between the people and the currency. Mobile Money Transfer (MMT) services are widely used by many countries today, but mainly with the local currency, the stability of which is duly sustained by their national financial and markets regulatory bodies. Kenya’s Mpesa is a good example. The early budget cuts by the president himself due to a potential budget deficits has contrasted the window dressed 2017 budget of roughly $360 million passed by both houses recently. This is a typical example of the myopic vision of the country’s leadership who prays on a broken nation by interest, tribalism and ignorance.
ZAAD services of the Telesom company was first introduced in the year 2009; it is an eight years old digital payment service, which has profoundly constructed a deep relationship with both the local people and those in the Diaspora through its simple usage and convenience. I can send money back home to my family today within fractions of a minute by the help of this wonderful technology. To be honest with you all, such companies deserve to be praised and encouraged rather than being smeared with naïve, interest-centric and made up allegations. Remember Bill Gates, the former chief executive and the chairman of the world’s largest computer software company has exclusively praised the simple yet user-friendly services of Telesom in mobile banking at Sibos closing plenary in Boston 2014.
An exchange data from the Central Bank of Somaliland itself; summarizing the trends of the Somaliland shillings Vs US dollars, would further disapprove the government’s claims of these inflations since the induction of ZAAD services. When we see the exchange rates by year on year basis, the data expressly demonstrates, times where the Somaliland shillings strengthened against dollars and vice versa. Please see the below tables for the trend summaries and the percentage increases and decreases of the USD/SLSH.
(Based on exchange rates for the last 8 years from the Central Bank of Somaliland)
Conspiracy Theories and their Implied Risk
Free trade and free markets based economies constitutes major constitutional sections of Somaliland to confront monopolistic tendencies, but the abuses, misquotations and misrepresentations of these sections were consistent in the Somaliland history. This is because; nepotisms and interest groups with power-connections were always the main sources of the abuse. Mr. Ahmed Aw Saed, the owner of the biggest yet the only fiber-optic cable internet provider known as (Somcable) is a good example in this regard, as this man is believed to has been one of the biggest financiers in the campaign trail of the incumbent president. Furthermore, there were no genuine public tenders ever advertised among the competitors, whilst the National Tenders Commission was commenced just for appearance.
According to reliable sources, at the outset of the government’s announcements on the service limit deactivations, there were several interrelated organized strikes on parts of Hargeisa city (the capital), which has triggered an immediate ZAAD deposit withdrawals by many service users in the other two biggest cities of the country__ parts of Barbara and Burao. It’s a widely acknowledged fact by anyone who has the basics of banking and finance, if a huge serge of customers queue up for an immediate deposit withdrawals with their bank; the bank might sometimes not be able to answer such huge parallel cash-drain by its customers and would face an untimely liquidity crisis, and hence could risk to be bankrupted. This is because, the banks are not depositories for just cash dumping, but they are creditors, lenders and investors using both the initial capital that normally comprises of the equity and debts of the owners and the potential deposits from the other sources both public and private. Making profit is a universal objective of all business organizations. The financial institutions, however, having the same profit mindsets, they are involved in term investments to make business and basically meet their investors’ obligations.
Thanks to the solid financial position and the buoyant market image that the Telesom Company has. The company’s management have professionally answered to that minor blight and considerably maintained the ZAAD liquidity to uphold the public trust and confront any propagandistic maneuvers. But, if the government has had hands in glove with the said conspiracy, this would actually be the genesis of a new, but an unprecedented business warfare that my people ever experienced and the turning point of a small nation endured decades long ordeals unknown to many people across the world, but signed boldly in the hearts of millions within.