Monday 24 June 2013

Somalia's lifeline under threat

I started this blog post in 2013, following a decision by Barclays Bank in the UK to close the accounts of Somali and other remittance companies. The problem has spread to other countries, most recently the US where on Friday 6 February 2015, the main bank providing services to Somali money transfer companies, Merchants Bank of California, closed their accounts.

Initially, the US-based Somali remittance companies suspended operations - but on 28 February they said they would restart operations, albeit in limited form. How will they do this?  By carrying cash. I have highlighted the relevant part of the press release.

          Statement of the Somali American Money Services Association.
                                      Press Release
 February 28, 2015

Since Merchants Bank of California terminated the accounts of Somali American Remittance Companies on February 6, transmission of family support money to the needy Somali people in East Africa grounded to a halt. Remittance companies lost the bulk of their wiring capabilities and were forced to drastically scale down their services in many states and completely shut down in many others.
For a long time, the Somali American Money Services Association (SAMSA) had been reaching out to US regulators, elected officials and other Government officials by warning of an impending humanitarian crisis in the Horn of Africa if the un-banking of remittance companies was not resolved. Unfortunately the situation appears to have come to the precipice SAMSA and its advocates have been warning of. SAMSA wishes to convey its utter disappointment that, at the moment, there is nearly no sustainable channel to wire money to the desperately poor people of Somalia – unless hundreds of millions of dollars a month are packed in suitcases and physically transported across continents.
In recognition of the magnitude of the problem, Members of the US House of Representatives and Senate met with the State Department and Regulatory Agencies on February 26, 2015 in an effort to find a solution to this critical problem. SAMSA wishes to express its dismay that this high profile meeting could not identify a single possible short term solution to this crisis. We wish to share not only our disappointment but our conviction that there is surely a way to maintain this lifeline to the Somali people.
For SAMSA members, remittance is not just a business; it is personal. We run a service that is the single most important component of the Somali people’s livelihood. For millions across East Africa, the $150-$200 a month remittance means the first and last line of defense against starvation and homelessness. It is what ensures the children we left behind continue to have food on the table. It is a vital bulwark against that next, ever-looming man-made famine.
Considering the magnitude of the potential humanitarian crisis, the Remittance Companies have resolved to resume their services in a limited capacity on March 1, 2015, even if it is only possible for a few weeks or months more with the unsustainable options that remain for transporting money. The plan is to utilize the last remaining option available to us (carrying cash abroad in person), no matter how unsafe or antiquated, to deliver money until it, too, is no longer available. In all likelihood, this desperate option will not last for more than a month or two, but it will be worth it if we can prevent an avoidable, artificial famine even for a day longer.  Not only is this method too costly and unsustainable, it also is likely to result in the loss of nearly 50% of transmissions, as Money Transfer Companies will stop operating in many regions due to the fact that it will be unrealistic to transport money from them. We estimate that, with the limited capacity, these efforts will result in the resumption of only about 50% of transmission volumes.
Meanwhile, SAMSA continues to believe in the willingness of the United States, its regulatory Agencies and elected officials to find a lasting solution to this problem. In Particular, US Treasury and State Department cannot afford to continue taking this lightly. It is our belief that the US Government does not intend for this money transfer shutdown, or its inevitable humanitarian, economic, security and political consequences, to transpire.
Finally, SAMSA wishes to appreciate the efforts of elected Members of the US House of Representatives, Senate and the Humanitarian Organizations that continue to advocate on behalf of the millions of Somalis who face an uncertain future without remittances.

Contact: Abdulaziz Sugule, 612-481-4446,;

Aden Hassan, 651-434-3697,

Saturday 8 June 2013

Kismayo - The Somali Tinderbox?

This is a report I did for the BBC about the fighting in Kismayo, which erupted on 7 June 2103:

At least ten people have been killed in a second day of fighting in the southern Somali city of Kismayo, which is a crucial economic and strategic hub. African Union forces are trying to mediate between the rival militias, which are led by two self-declared presidents of the region, known as Jubaland. The Somali president, Hassan Sheikh Mohamud, has appealed for an immediate ceasefire. Mary Harper reports:

Residents of Kismayo say the fighting is intense. Militiamen are firing continuously from pick up trucks mounted with heavy weaponry. Hundreds of people are fleeing the city. The Somali defence minister is in Kismayo trying to resolve the crisis. He faces a near impossible task. Kismayo is a complex city, inhabited by some thirty different clans. All compete for lucrative port revenues, and access to land, the most fertile in Somalia. The fear is that more clans will start fighting, plunging the country back into civil war and giving the Al Qaeda linked group Al Shabaab an opportunity to retake territory lost in recent months. At least four men have declared themselves president of the region, none of them recognised by the Somali federal government. The situation is further complicated by the involvement of Kenya. There are more than four-thousand Kenyan troops in Kismayo as part of the African Union force, which provides security in some parts of Somalia. Kenya has been accused of following its own agenda in southern Somalia, supporting local militia leaders in order to set up a buffer zone between the two countries. This has led to tensions with the Somali federal government, which fears it is losing the region to a Kenyan backed group which does not respect central authority.

Events in Kismayo sparked a Twitter storm. You can read some of the Tweets here.

This report on Kismayo by the Mogadishu-based Heritage Institute for Policy Studies provides useful background: The Kismaayo Crisis: Options for Compromise

Kismayo-bound plane belching smoke from its back end

If you are planning on taking a trip from Mogadishu to Kismayo, it's probably best not to read this brilliant article by the Somali journalist, Hamza Mohamed: Pray before, during and after your flight.