Somali diaspora’s remittances cast a lifeline

Interview with a money transfer chief executive
From Africa Renewal: 
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Busy market-place in Mogadishu, Somalia’s capital. With the security situation now more stable, economic activities are growing. Photo: AU-UN IST/Tobin Jones

During two decades of conflict, famines and floods, money sent back home by Somali expatriates — known as remittances — has been instrumental in keeping Somalia afloat. The UN Development Programme estimates that $1.6 billion in remittances is sent back annually by Somali emigrants living in North America and Europe. Abdirashid Duale, a Somali who is chief executive of Dahabshiil, one of the largest money-transfer businesses in Africa, says that such transfers have been “a lifeline” for Somalis. 

Now that security has improved in Mogadishu after the ouster of Al Shabaab Islamist militants in October 2012, he believes that strong economic growth can help drive peace. He shared with Africa Renewal’s Jocelyne Sambira his hopes for a “business-friendly” administration.

Africa Renewal: How do you see the political situation in Mogadishu today?

Abdirashid Duale: The recent election, which was the first held in Mogadishu in more than 20 years, represents a great achievement. It’s early days yet, and the new administration has a lot of issues to address. I am a businessman, not a politician, so it is not my role to talk about politics. I hope, however, that the new government will be business-friendly.

I believe that encouraging the Somali business community, which is extremely dynamic, will enhance peace and development. The diaspora, as the primary source of funding for Somali enterprise, will of course play an important role. Remittance finance, the majority of which comes through Dahabshiil, accounts for a large proportion of start-up capital in the Somali territories and has enabled the private sector to be the great survivor of the last two decades.

Security has improved in the capital, Mogadishu, and the city of Kismayo is now in the hands of the government. What do you think will help stabilize the country?

There are still many challenges ahead. Addressing them will take time. However, I am sure development and job creation will help, as economic improvement plays such a key role in enhancing and cementing peace and stability. The business community, which is in so many ways a Somali success story, can help stabilize the situation. Dahabshiil, for example, works all over the Somali territories. It employs thousands of Somali people regardless of their clan or regional affiliations. We also apply this unifying approach to our customers, as we serve all Somalis, no matter where they come from.

As a businessman, what are your expectations of the new government?

I am always optimistic, and I hope the recent changes will improve life for all Somalis. I hope the new government will introduce policies that encourage the private sector. I also hope it will focus on the new generation and listen to the ideas of the youth. It will be important to encourage the growing number of people returning from the diaspora to invest and stay in the Somali territories. Many members of the diaspora are returning with useful skills, but it is also important to train people locally. The new government should work hard to encourage not only Somali but also foreign investment. Dahabshiil continues to set an example by being fully compliant with anti–money laundering and other regulations, both locally and internationally.

Somalia relies heavily on remittances to survive. Will this continue for long, or do you expect other investments to flow in?

Remittances remain a lifeline for many Somalis. They help Somalis in many different ways. Somalis are by nature entrepreneurial, which explains the recent increase in investment in Mogadishu and other parts of Somali territories. I expect this trend to continue. As long as there is peace, people will keep on coming back to their homeland. Remittances are set to keep flowing, as are other investments.

Dahabshiil has noticed that remittances still flow into the other African countries in which we operate, including South Sudan, Rwanda and Uganda. Remittances play a crucial part in the development of many of the 150 countries we operate in. They are part of the global economy. They are part of life, not only in the Somali territories, but in many other parts of the world.

You travel to Mogadishu. What is the situation like now?

Security has been improving in Mogadishu. The humanitarian situation has improved for some Somalis, but many are still in desperate need. Dahabshiil works and will continue to work with international aid organizations. One of our most recent activities was the donation of more than $100,000 for flood-stricken communities in the Beledwein region.