The decision by Barclays Bank plc to terminate its support for the money transfer operations that are a lifeline for Somali citizens and their families risks choking the fragile recovery that our country’s economy is at last beginning to make after two decades of turmoil.
In this past year, we have made advances in security, education, human rights, public finance management, reconciliation and good governance. However there is still a long way to go and Somalis still depend heavily on the Somali diaspora for help.
Somalis in the UK, US and throughout the world send about $1.3 billion back home each year. These remittances provide essential income for 4.2 million Somalis, represent half of our country’s national income, and dwarf what the country receives in international aid.
The average remittance transfer is between $100-$200, the same as the average monthly income for a Somali family to survive on. For many, these remittances make a difference between a full belly and hunger, education and ignorance, sickness and health.
In addition, remittances provide 80 per cent of all start-up capital for SMEs in Somalia, and 95 per cent of the funding for NGOs and humanitarian projects are reliant on money transfer services to carry out their day-to-day humanitarian operations.
Barclays has not explained its decision to withdraw banking services to money transfer operators but if, as is believed, this is motivated by US regulatory and policy concerns, then Barclays’ action seems to be at odds with US policy.
FORMAL RECOGNITION
The US formally recognised the government of Somalia in January this year in acknowledgment of the security and political gains made. And USAid has a number of programmes to promote, and enhance the development effectiveness of remittances to Somalia and other nations.
We, Somalis, know the threat and impact of terrorism and corruption and are fighting both as hard as our negligible resources permit. Now, suspending the banking services will force what has been a transparent process of payments via bank accounts to become a much less transparent and more dangerous process of transporting money across borders.
The threat to this lifeline will only play into the hands of Al-Shabaab, who will capitalise on the financial vacuum to try and destabilise the country.
They will tell their followers and whoever will listen that the West does not care and is responsible for the suffering of the Somali people. For the young men pushed into their clutches, that message will have the force of truth when the flow of remittances to their families dries up.
The money transfer companies will come up with a solution acceptable to all sides if they are given a realistic deadline. A regulatory solution that will enable cash transfer accounts to remain open must be found, but it needs time and we cannot have a situation where this solution is owned by everybody and nobody at the same time.
I, therefore, pray that this deadline is extended. This will allow the major regulatory authorities and banks to come together urgently with the money transfer operators to consider the various options available, and find the solution before ordinary Somalis are seriously hurt and the country’s progress and stability are sent into a devastating tailspin.
BY ABDIRAHMAN O. OSMAN
