The Guardian –

Some businesses, including British Airways, National Bank of Kuwait and Eli Lilly, have donated money. Dahabshiil, headquartered in Whitechapel, east London, has given $100,000 (£61,477) to victims of the drought and has urged other international businesses to follow suit.

The company’s chief executive, Abdirashid Duale, says Dahabshiil, which handles remittances, has seen a 10% rise in money sent to east Africa since a crisis was declared last month, although he declines to give detailed figures. For the Somali diaspora alone, Dahabshiil remits a large proportion of an estimated $1.6bn sent every year.

Duale says the Somali community in the UK has been mobilising to raise money.

“They come to our office wanting to donate in any way they can, they are organising in cafes, mosques and in the community,” said Duale. “The events in London have affected everybody and maybe overshadowed the crisis in east Africa but every Friday people come together for prayers and I’m sure today they will gather in mosques and donate what they can.”

Duale says there has been a good response from aid agencies, religious leaders, the general public and all Somalis, but it is the business community that can make a real difference now.

“We, as kith and kin Somalis, with the same culture and the same religion, urge the international business community to dig deep and provide the final push the people of east Africa need, especially during this holy month of Ramadan,” he said.

Read full story here

Read the complete article at: http://www.voanews.com/english/news/europe/Somalis-in-Britain-Help-Nation-Through-Drought-125366948.html

In East London, Mohammed Hussein is sending money to his family in Somalia. He says when drought hits they depend on it.

“If it doesn’t get to them, what are we going to do? They’re probably going to die out, to be honest,” said Mohammed Hussein. “People might even wait for rain for three or four months, six months – you never know. All the cattle, all the sheep, everything’s dying at that point so the economy is really, really, poor – I wouldn’t even say we have an economy out there. The economy is us, people out here in London, I would say.”

Many Somalis save hundreds of dollars every month to help their family and friends in the Horn of Africa.

Dahabshiil is the largest money transfer company operating in Somalia. It was founded over forty years ago by a Somali entrepreneur.

Today, the founder’s son, Abdirashid Duale, is chief executive.

“I am British but at the same time I am Somali and many of our customers are like that, whether they are Somali, whether they are Ethiopian, whether they are Ugandans,” said Abdirashid Duale. “People are going to about their normal life so that is why a bus driver or someone who is working in the hospital or someone working in the London underground will come to our office and they will send money back to their family and then they will continue living like they would be living in any part of the world.”

Somalis send back extra funds in times of crisis, like now. Somalia is at the center of a drought that’s swept a number of East African countries.

In the war-ravaged capital Mogadishu local aid groups are trying to feed the hungry.

Many people have fled to the world’s biggest refugee camp in Kenya. Others to Ethiopia. Across the region some 10 million people are thought to be in need of humanitarian aid.

But aid is only one way to give help, says Sarah Bailey from the London-based Overseas Development Institute.

“The important thing to keep in mind is that households don’t rely on just one source of assistance,” said Sarah Bailey. “Humanitarian aid can play a very crucial role but it’s only one tool that families need in a time like this.”

An estimated $1.6 billion is sent to Somalia by the diaspora community every year. Bailey says cash is vital in helping families survive, especially when crisis hits.

“I think cash can be extremely empowering to people who are facing a crisis situation and increasingly aid agencies are looking to provide cash-based assistance and not just providing food aid,” she said. “Remittances allow households to make whatever decisions that they think respond to their priorities.”

1 July 2011

Abdirashid Duale, CEO of Dahabshiil, one of Africa’s largest money transfer companies, gave the keynote address at a conference hosted by Oxford University from 29-30 June.

The two day event, the first of its kind to focus on important issues facing the Somali diaspora community, explored in particular how developments in media and communications shape the way the diaspora engages with and influences the population at home politically, economically and culturally.

Other speakers at the event included academics from both within and outside Oxford University, along with journalists from the BBC, Al Jazeera, VOA and other media institutions including several prominent Somali outlets.

Dahabshiil has a 40-year history of serving communities around the world. Its current core business is in the transfer of remittances to East Africa, a vital flow of income to many in the region. Its expanding network of agent and payout locations stretches to some of area’s most remote locations, extending an essential lifeline to the inhabitants and helping to sustain isolated local economies.

In his keynote address, Mr Duale discussed the rapidly developing regional telecoms industry, and in particular how Dahabshiil’s money transfer operations are becoming increasingly interlinked with the company’s growing involvement in the latest wireless technology, working closely with strategic partners.

He went on to discuss Dahabshiil’s recent acquisition of a majority stake in SomTel, a fast-growing, leading Somali telecoms and mobile internet firm with expertise in advanced wireless technology and high speed broadband.

The Somali region’s telecoms industry, as Mr Duale explained, is one of the most competitive in the world, having undergone rapid expansion since the early 1990s. He remembers a time when there were no private telecoms companies in Somalia, just a state-owned network. Back then, high frequency radio was still the preferred method of communication – cheap, simple, and mobile. In some of the more remote regions, Dahabshiil even used HF radio for its operations; as he put it, ‘HF was, for us, the mobile of the time’.

There are currently up to thirty private telecoms companies providing voice and data services across the Somali-speaking regions. Demand is strong and price increases are limited by stiff competition. Consumers also stand to benefit from the fast-approaching interconnection of telecoms operators, as well as the imminent installation of a fibre-optic marine cable that will enable high speed internet.

Telecoms services are becoming ever more widely available and the costs of international calls are among the lowest in the world. Mr Duale believes that with such affordable mobile networks in place and a growing number of companies – including SomTel – offering the latest GMS technology, the infrastructure is in place for a rapid expansion of Dahabshiil’s mobile banking and ‘eCash’ debit card services across the region and beyond. The benefits of such a development in the money transfer industry will be far-reaching.

The efficiency of these new services is something with which Dahabshiil’s customers are already familiar; remittance transfers in and out of Africa take minutes to clear regardless of where in the world money is sent or received. Customers have access to a web-based transaction tracking facility, and an SMS notification is sent to the recipient as soon as the funds are available.

Closing his speech, Mr Duale returned to the issue of migrant communities. “Dahabshiil”, he said, “is a migrant-run business that understands the needs of diaspora communities, and helps to strengthen their links wherever they are in the world.”

In an interview for the Financial Times published last month, Mr Duale spoke about the importance of that understanding to the success of his business:

“Without knowing your people as your customers and your staff, and them trusting you, you cannot be in business. I knew Somalis, I knew how to serve them, so it was not some sophisticated customer I had to find,” he said.

The UN estimates total annual remittance flows into Africa to be around $22 billion, having risen from $9 billion in 1990. Remittance flows within the continent, particularly to rural areas, have also increased as a result of rising mobility. Many East African countries rely on remittances to sustain economic development, and the integration of mobile telecoms with money transfer services will eliminate many of the regional challenges currently faced by the latter and greatly improve access to finance in some of Africa’s poorest communities.

African governments have worked to liberalise exchange rates, whilst mandates have been issued to address the financial strains placed upon banks. Mr Duale believes that a number of political and socio-economic factors have contributed to the emergence of Africa as a player in the marketplace – something he insists should be celebrated on Africa Day.

Abdirashid Duale said: “I truly believe that Africa Day 2011 marks a turning point for the African financial system. Overall, the economy is thriving. Market liberalisation has resulted in increased investment in the private sector, and when you set that against an abundant supply of natural resources such as oil and metals, it is clear that the African economy is entering a phase of accelerating organic growth. It is important however that investment and reinvestment remain strong.”

The economic crisis did not have as heavy an impact on African countries as it did on their global counterparts. Many of Africa’s 48 economies are recovering at a faster rate than the rest of the world, with growth in output rising to approximately 4 per cent overall for the continent. In addition, Sub-Saharan Africa is increasingly attracting investment opportunities as a result of improved management of public finances.

Africa’s recent fiscal development can be traced to a range of factors including remittances sent back to Africa from migrant workers. Funds remitted to Africa by its global Diaspora play an important role in national economies, providing a supplementary source of income which boosts private sector growth. Dahabshiil sends approximately $1bn back to Africa every year, and is the largest of the international payments firms established in Africa.

Globally, money sent home by migrants constitutes the second largest financial inflow to developing countries, exceeding international aid. Remittance income is especially vital for communities in more remote regions of Africa, and helps to bolster the funding of humanitarian organisations operating in those locations.

Mr Duale added: “I know that remittances have been an essential lifeline for many communities across Africa. I believe the African Diaspora sends approximately $40bn annually to families and local communities back home, which has undoubtedly played a role in fuelling Africa’s economic development.”

About Dahabshiil

Dahabshiil is an international funds transfer company and the largest of the Somali money transfer operators. The company employs more than 2,000 people across 144 countries, with offices in London and Dubai. Dahabshiil provides a broad range of financial services and invests in state-of-the-art technologies to offer both SMS notification and 24 hour online transfers to its customer base. Dahabshiil has a comprehensive and robust compliance and anti-money laundering programme, used throughout its network to ensure full compliance with all relevant regulations.

Dahabshill’s mission is to strengthen its market position as the premier regional money transfer organisation. The company plans to expand its global network of agents, to continue to build strong partnerships and to develop new products and services to meet the growing expectations of its customers.

http://www.prnewswire.com

By Katrina Manson

Published: May 24 2011 21:25 | Last updated: May 24 2011 21:25

Steeped in the community: Abdirashid Duale says his family has built the business through understanding its customers and developing a network of outlets

Aged eight, Abdirashid Duale would rush back from school to take his place in the family’s small shop in Burao, a dusty livestock trading town in Somaliland, selling everything from clothes and shoes to flour and sugar.

Today he divides his time between London and Hargeisa, the capital of Somaliland, an autonomous region of Somalia that declared independence in 1991, and is the chief executive of Dahabshiil, a global money transfer company that operates through 24,000 outlets in 144 countries. Dahabshiil also offers debit cards, reward points and SMS notification services and, soon, Somaliland’s first fully operational bank which is currently under construction in the capital.

“From a very early age I got used to talking to adults … while other friends or even my brothers used to play football, for me my fun was to stay in the store, and sell people goods,” he says. He even drove his father’s car, at age 13. “I was in competition with other people who were working for my father, so I wanted to be useful and serve him,” he says, speaking in the garden of a Nairobi restaurant.

In four decades, Dahabshiil has evolved into an internation­al bus­iness that uses the most modern technology. However, working in Somalia, a failed state, means danger has never been far away: in 2009, two workers were killed in an attack by al-Shabaab, an Islamist group, forcing the business to close half its 50 or so Mogadishu outlets. To this day, the company sometimes transports cash hidden in cars. Mr Duale thinks the company’s best protection is its local approach: “We are ‘money without borders’ – people need us. Customers see us as a part of them. We’re bringing money to them, not guns, so they will look after us.”

The business was transformed from the shop of Mr Duale’s 1970s childhood into a global business by finding opportunities in a string of calamities that have befallen Somalia – from poverty to war and terrorism.

For the family’s story is also the story of the Somali diaspora. Poverty and trade first sent Somalis to Yemen, Dubai and the Middle East. In 1991, the capital Mogadishu was overwhelmed by fighting between rival groups, earning Somalia its label as a failed state. Perhaps 1m Somalis scattered throughout east Africa but also to the Middle East, Australia, Europe and North America. “After 1991 all the Somalis were displaced in a way,” says Mr Duale. “I’m one of them, so we know where they live, how to communicate with them and serve them.”

Mr Duale says his company handles remittances of $200m a year to east African countries outside Somalia, and that the company also remits a large proportion of an estimated $1.6bn sent back to Somalia every year, making it the largest money-transfer service in the Horn of Africa.

Doing business in hard places

Abdirashid Duale learnt how to expand the family business amid war, poverty and even the strictures of doing business in the west.

● Start young. “In Burao [town], you can take more responsibility from a very early age: you become more mature by doing this kind of activity. It was job training from a very early age.”

● Serve your community. “Without knowing your people as your customers and your staff, and them trusting you, you cannot be in business. I knew Somalis, I knew how to serve them, so it was not some sophisticated customer I had to find.”

● Adapt. “I could have said ‘I don’t want to expand in Europe – it’s too much, it’s not easy to be in that field with a different language’ but I didn’t. I said: ‘I have to get used to it.’ And then I came back to Somaliland … and I had to re-educate myself.”

● Market yourself. Dahabshiil took on a UK public relations agency to deal with international press interest when the company issued its first debit card in Somalia, which was – and remains – a failed state.

● Do what you love. “It’s by feeling passionate about it that you expand your business.”

Yet Dahabshiil started by default, a device to overcome one of many challenges in running a business in Somalia. In order to stock the latest shoes from Milan, Mr Duale’s father, Mo­hamed Saed Duale, needed hard currency for purchases from the trading hub of Yemen. Meanwhile, the Somali diaspora was keen to send money home, so Mr Duale’s father would collect hard currency from them in Yemen to buy the shoes, then hand the money over to the “lenders’” family members in Burao in local currency, making an additional cut on the exchange rate. Remarkably, rather than pay interest, he had found a way to turn a profit on borrowing.

That sideline would become the heart of the business. But it was not always clear it would be that way. Mr Duale can still remember when a liberation force invaded one day in 1988, and the defending regime res­ponded with bombs: “There was blood everywhere – we couldn’t stay. We left our car, our shop, our house, everything.”

The family fled to live among nom­adic herdsmen and eventually his father reached the Ethiopian border, found Somalis in desperate need of sending and receiving money, and set about making it happen. The business model soon changed, as no one want­ed rapidly depreciating local currency. Instead, the company made a double cut by charging a commission and operating a currency exchange service situated in its outlets, a model it keeps to this day.

Getting money back to Somalia was often risky and, in some countries, restricted. “You can manage to hide $200,000 yourself if you know the technique,” says Mr Duale of people’s ef­forts to secrete cash.

Another hurdle to expansion was regulations. When Mr Duale registered as a teenage sole trader in London’s East End, home to waves of immigrants over centuries, to set up the first European branch of Dahabshiil, he met an alien way of doing business: “I knew Somalis, I knew how to serve them, but I did not know about formality – in Burao you don’t need accountants, lawyers, a bank.” Despite his unsteady English, he found an accountant, bought a guide to doing business in 12 European countries and began unravelling the red tape, working seven days a week.

Dahabshiil has been so good at complying with host countries’ regulations that it won customers when al-Barakat, one of its Somali competitors, was shut down by the US after the September 11 2001 terror attacks. Mr Duale insists that no money within Dahabshiil funds pir­acy – an­other Somali blight – or terrorism, and regularly co-operates with international agencies when asked.

The father-and-son team plays to its strengths, especially when it comes to understanding the culture in which the company operates. Mr Duale looks after the western side of the business and his father, now chairman, looks after Africa. The strategy has helped the company keep up with developments: today, funds can be transferred online in minutes, and it uses Facebook and Twitter, alongside developing its banking and tele­coms operations as part of Dahabshiil’s expansion.

Although they work as a team and, as a boy Mr Duale hankered to be like his father, relations are not always straightforward: “Sometimes you don’t know – are you talking to your boss or are you talking to your father? When he tells me my mistakes is he talking to his son or to his staff? Sometimes you would like things to be a little bit separate.”

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Roberta Russo, Public Information Officer at UNHCR Somalia, said: “We hope this marks the beginning of a new era of interaction and dialogue between the Kenyan and Somali communities, which have been living side by side for decades.

“We have chosen the theme, ‘Now I Know’, as we want to give Kenyans a better understanding of the lives of Somalis and the events which have led to their arrival here in Kenya. It is important for effective integration that the Kenyan community understands why Somali migrants are here, how they feel about living in Kenya, and that they didn’t necessarily have a choice.”

More than 3,000 people attended the event at Eastleigh High School in Nairobi on 16 April 2011. Contributing to the celebrations were leading Kenyan and Somali acts including Kenyan singer-songwriter Erick Wainaina, Kenyan genge artist Jua Kali, Somali singer Waayaha Cusub, Kenyan comedian Eric Omondi, and Somalilander poet Muhammad Ibrahim Warsame Hadraawi.

Abdirashid Duale, CEO of Dahabshiil, said: “Dahabshiil is delighted to be involved with this event, the first of its kind in Kenya and one which we hope will encourage greater understanding and collaboration between the Kenyan and Somali communities. We will remain committed wherever possible to supporting such initiatives to promote the integration of migrant communities.”

Speaking at the event was Daud Aweys, a BBC Somalia analyst, who discussed the issues facing Somalis in Kenya. He stressed the need for interchange and cooperation between the two communities and congratulated Dahabshiil and the organisers for making the occasion possible.

Dahabshiil has a 40-year history of supporting Somali-speaking communities around the world and invests $1 million every year in community regeneration projects and charitable efforts across the 144 countries in which it operates.

In East and Central Africa, Dahabshiil is one of the top private investors in hospitals and health centres – helping to develop infrastructure and provide financial support, equipment and medicines.

In the Horn of Africa, Dahabshiil has made an important contribution to ongoing relief work, making donations and assisting the management and distribution of funds for humanitarian and development organisations that work with communities affected by conflict, drought and famine. Some 95% of international organisations operating in the region, including the UN, World Health Organisation, World Bank, Oxfam, Save the Children and Care International rely on Dahabshiil to transfer funds.

Abdirashid Duale added: “Remittances are an essential lifeline for many communities across East Africa which depend on Dahabshiil to receive income from abroad and to facilitate much-needed private investment. The flow of remittances into the region has played a crucial role in the growth of the telecoms, transport and housing sectors, as well as in improving basic infrastructure, healthcare and education.”

Founded in 1970 in Somaliland as a general trading enterprise, Dahabshiil has grown to become Africa’s largest money transfer operator. It has invested heavily in expanding its network of pay-out locations, as a result of which the inhabitants of some of the Horn of Africa’s most remote locations have regular access to funding from overseas.

Despite its international success Dahabshiil has remained committed to a policy of low commissions, charging fees significantly lower than other international providers and enabling migrants to send funds regularly and cost-effectively, regardless of their whereabouts or the size of the sums transferred.

The two-hour talk took place on Tuesday 29 March as part of a course titled, Managing Innovation and Change, led by Professor Liisa Valikangas.

Professor Valikangas, an experienced researcher and recognised expert in innovation and strategy, selected Dahabshiil as a model example of a business which has been quick to embrace new ideas, and which has overcome tremendous odds to realise the potential of the African market and build what is now a global brand.

During the talk, Mr Duale discussed the importance of remittances to Somali communities worldwide, and outlined the role that Dahabshiil plays in getting funds to where they are most needed. He went on to discuss the history of the company, its plans for the future, and his role as CEO.

Dahabshiil’s core business is in the transfer of remittances to the Horn of Africa – a vital source of income for many in the region as Mr Duale explained at the start of his talk. The World Bank estimates that around $1.6 billion is remitted to Somalia each year by the country’s global Diaspora. Dahabshiil handles around two thirds of this capital flow, making it the largest money transfer operator in Africa.

Remittance income is an essential lifeline for communities in the Horn of Africa’s most remote areas, and helps to bolster the funding of humanitarian organisations operating in the region. It also helps to support local development initiatives – a theme central to Dahabshiil’s ethos from the company’s earliest beginnings.

Just as importantly, the flow of remittances also facilitates domestic and international trade, and has proved essential in enabling sustained investment in commercial projects and promoting vigorous private sector growth.

Dahabshiil’s early years, as Mr Duale told the diverse mix of students in the Toolo campus of the School of Economics, were far from easy. The company was founded in 1970 by his father, Mohamed Said Duale, and quickly specialised in the remittance of funds from migrant workers in the Middle East, bypassing strict foreign exchange controls through a system known as Franco Valuta (FV) which involved the import of goods, proceeds from the sale of which were paid to the migrants’ families.

By 1988 the civil war in Somalia was reaching its peak, and the Duale family were among the hundreds of thousands forced to flee to neighbouring Ethiopia. It was there that they rebuilt Dahabshiil from scratch. This not only meant a new location, but a complete change of customer base and stiff competition for business in a war-torn region with little or no political or legal framework.

Twenty years on, Dahabshiil has a truly global presence and serves communities across the whole of East Africa. The Group has regional offices in London and Dubai, and thousands of agent and branch locations in 150 countries worldwide. Remittances still account for the bulk of Dahabshiil’s business, but the company has diversified to offer a full range of financial services to its international customer base.

Always quick to pinpoint new areas of growth, the company acquired a majority stake in SomTel, a Somali mobile network operator, in 2008. The telecoms industry in the Horn of Africa is highly competitive, a consequence of which has been the rapid growth of reliable and uniquely low-cost mobile networks. SomTel’s expertise in mobile telecoms, mobile internet and high speed broadband have enabled Dahabshiil to launch a full mobile banking service in the region, and to continue to upgrade and expand its online payment systems. These systems are already known by customers as among the fastest in the business; remittance transfers in and out of Africa take minutes to clear regardless of where in the world the funds are sent or received.

The SomTel acquisition is a logical next step for Dahabshiil, which introduced Somalia’s first ever debit card, ‘Dahabshiil eCash’, in 2009. The service has already helped to reduce the drag on the economy arising from the need for large quantities of paper money for transactions in Somali shillings; the expansion of mobile banking will extend this benefit further. It is even anticipated by some observers that Somaliland will become the world’s first cashless society.

Mr Duale believes that financial services in Sub-Saharan Africa will continue to promise much in the way of new opportunities – as he declared towards the end of his talk, ‘Africa is the future!’ The region’s role in the international financial system will grow, he said, as will the inward flow of remittances. As for Mr Duale, his role as CEO is to ensure that the Group continues to adapt to the changing environment through strategic investment and identification of growth markets, while maintaining its core business, easing poverty in rural areas and providing strong support to Somali communities, in Africa and around the world, through ongoing corporate social responsibility projects.

Notes for Editors

Dahabshiil is an international funds transfer company, and the largest African money transfer operator. The firm has its headquarters in London and operates from over 400 branches worldwide.

Dahabshiil provides a broad range of financial services and invests in state-of-the-art technologies to offer SMS notification and 24 hour online transfers to its customer base. The company also employs specific technology to ensure maximum security, and to satisfy international protocols and procedures aimed at combating money laundering, terrorism, and other illegal usage.

Professor Liisa Valikangas teaches innovation management at Aalto University in Finland. As President of Innovation Democracy Inc, a non-profit company she co-founded in 2006, she has a long-standing interest in innovation and entrepreneurship as a way to build better lives in fragile countries (see http://www.innodemo.com).

Dahabshiil CEO in Hargeisa flanked by BBC reporter Zeinab Badawi

LONDON, February 3, 2011 — By handling remittances from the international Somali diaspora, Dahabshiil provides a vital source of income for African communities and in doing so, has become Africa’s largest money transfer company, according to a recent article by the BBC.

In the interview by Zeinab Badawi of the BBC, Dahabshiil’s CEO, Abdirashid Duale, speaks about his company’s operations in Somaliland and of the difficulties in doing business abroad that arise from the unofficial status of the region, once British-controlled, in North West Somalia.

However it is precisely this lack of formal international recognition, isolating Somaliland from official foreign aid, which makes remittance income so essential to its people, and Dahabshiil’s service such an important lifeline.

The company was founded in 1970 by Abdirashid’s father, Mohamed Saed Duale, and grew over the next eighteen years to become the largest remittance broker in the Horn of Africa, selling imported goods on behalf of migrant workers and transferring the proceeds to their families.

In 1988 civil war broke out, forcing half a million Somalis to flee the country. In response to this exodus and to conditions in Somalia, Dahabshiil called upon its extensive business network to establish a new venture, enabling Somali refugees to send remittances back to displaced relatives.

As the diaspora grew, so did Dahabshiil. Today it is Africa’s largest money transfer operator with more than 24,000 agent locations and branches across the world. Tie-up agreements with strategic partners ensured its services reached the maximum possible number of Somali expats.

Customers at a Dahabshiil branch in Hargeisa

When asked by the BBC on the burning political issue of Somaliland’s independence, Mr Duale was circumspect, but admitted that its unofficial status does present Dahabshiil with a challenge.

The World Bank estimates that the Somali diaspora worldwide sends around $1bn (GBP632m) each year to relatives in Somalia, a regular capital flow that has helped to bolster its economy.

The chain of payout locations is now so extensive that people living in some of the country’s most remote regions have regular, easy access to funds sent to them from overseas.

Dahabshiil has remained committed to its low commission policy, charging fees significantly lower than other international providers and playing a significant role in helping to rebuild a vigorous private sector by facilitating investment in sectors such as telecoms, transport and housing, as well as in basic infrastructure, health and education.

Abdirashid Duale, CEO of Dahabshiil, added: “The fast and efficient transfer of remittances is an essential service for many people in the developing world, whose friends or family live abroad and regularly send money home.

“Dahabshiil is dedicated to assisting these communities and prides itself on its ability to provide a lifeline for people who need it most in hard to reach areas. This is why we have reliable systems and staff in some of the remotest areas.”

While remittances account for its core business, Dahabshiil also provides money transfer and banking services to local businesses as well as to humanitarian and international development organisations. In fact, over 95% of international organisations operating in Somalia, including the UN, World Health Organisation, World Bank, Oxfam, Save the Children and Care International rely on Dahabshiil to make payments.

The United Nations has previously described Dahabshiil services as “the only safe and efficient option to transfer funds to projects.”

SOURCE Africa Business

The Somali economy has become deeply dollarised, but the home currency continues to be issued on a large scale, resulting in its continuous depreciation along with double-digit inflation, especially for low-value transactions. With only reactive, ad-hoc government efforts to counter this decline in value, Somali businessmen assume the shilling is kept afloat by ‘common assent’.

What is more likely, as the article points out, is that the constant inflow of foreign currency in the form of remittances plays a valuable role in retarding this trend by exerting upward pressure on the shilling’s value. The largest of the transfer companies handling this capital flow, Dahabshiil, is a global money transfer operator with one of the fastest-growing agent and branch networks in the industry. It was established in 1970, primarily to enable migrants to transfer funds back to their families through the sale of imported goods.

Forty years on, remittance transfer remains Dahabshiil’s core business, but the company has diversified to offer a broad range of services to international organisations, businesses and private individuals, and is compliant with international standards including AML (Anti Money Laundering) regulations. Dahabshiil is now the leading financial services provider in the Horn of Africa, with full banking licences to operate in Djibouti and a number of other East African countries.

With payout locations in some of Somalia’s remotest regions, Dahabshiil’s service is recognised by the inhabitants as an indispensable lifeline. But the benefits go beyond this. The regular flow of funding from abroad has helped to strengthen the private sector by expanding investment in construction, transport and telecoms. This process is set to be further enhanced by the introduction of increasingly sophisticated technology, central to Dahabshiil’s strategy, to make remittances even easier to transfer and help them to penetrate further. Not only is the upward trend in remittance income likely to continue, but its effectiveness as a catalyst for development will be continually improved.

As well as facilitating private investment, Dahabshiil also invests $1 million of its annual profits in community projects in Somalia to improve schools, hospitals, agriculture and sanitation. In the UK, where Mr Duale spends much of his time, the company sponsors a number of social events including the Somali Week Festival and the Somali Youth Sports Association.

Dahabshiil has regional offices in London and Dubai, and employs over 2,000 people across 144 countries.

By Zeinab Badawi BBC News, Somaliland

Freedom Square reminds people of the struggle to break away from Somalia

SOMALIA – FAILED STATE

When you land at the clean, tidy airport in Hargeisa, the capital of Somaliland, you feel you could have arrived in any small African state. The police are courteous and wear freshly-pressed uniforms, the Somaliland flag flutters gently in the hot morning breeze, and you move briskly through the airport security. The taxi you take into town is paid for in Somaliland’s currency, the shilling.

But do not get carried away – despite the outward trappings of statehood, this is a country that does not officially exist. Somaliland unilaterally declared its independence from the rest of Somalia in May 1991, after the fall of the country’s military strongman, Mohamed Siad Barre. He fled the country exactly 20 years ago on Wednesday, after two decades in power.

Monument

I made my way to Freedom Square in central Hargeisa to see the monument, which reminds those here of the bitter battle they fought to break away from the rest of Somalia. Around 50,000 people died.

The actual fighter jet used by Barre’s forces to bomb the city is on a dais, underneath the figure of a woman holding the green, white and red of the Somaliland flag, looking skywards in hope.

There, I spoke to a local journalist, Albdelhakim Mohamed from the Jamhuriya newspaper.

“We want our independence here in Somaliland,” he told me.

Somaliland facts and figures

“We have a country. We have a parliament, a free press, and businesses just like London and New York.”

At the base of the monument, a body lay wrapped in cardboard.

At first I was not sure if it was part of the display, then I realised it was just a homeless man who had spent the night at its foot.

Around the monument is also a market where goods of all kinds are readily available.

Traditional spices mingle with the ubiquitous plastic of Chinese imports, brightly coloured sandals, plastic buckets and hair decorations.

Vital remittances

I walked through the market with Abdirashid Duale, the head of Dahabshiil, Africa’s largest money transfer company.

Abdirashid Duale admits Somaliland’s unofficial status affects business with abroad

Tall, elegant and expensively clad – his company makes a lot of money here – he was reticent to commit to whether Somaliland should be recognized as independent; after all, his business interests extend all over Somalia.

When I ask him whether Somaliland’s unofficial status affects business, he admits it is a challenge.

But Dahabshiil, like other financial corporations in the 21st Century, can base its headquarters anywhere in the world these days. Mr Duale spends most of his time in neighbouring Kenya.

From the people I chatted to informally in Hargeisa, I was left with the overwhelming impression that they would find it hard to re-integrate into the rest of Somalia.

Though with the Somaliland government so intent on independence it is hard to know if some were reluctant to speak their minds too freely.

People use money exchange centres to retrieve the funds sent to them by wire transfer

According to the World Bank, the Somali diaspora as a whole sends about $1bn (£632m) to their relatives back home every year.  Here in Hargeisa, with no official help from the outside world and no recognition as a state, most official aid is closed to them. So the remittances are a vital source of income.

People use the many money exchange centres dotted around Hargeisa to retrieve the funds sent to them by wire transfer.

I went into one office with Mr Duale.

Some people recognised him as the big boss, and I had no trouble being escorted into the back office where money was being counted.

Despite the scene, often money does not actually change hands – many transactions are carried out over the internet.

‘On our guard’

Somaliland seems a world away from the chaos and violence of south and central Somalia, which includes the capital Mogadishu.

Somaliland President Ahmed Mohamed Silanyo says he hopes for independence. The country is divided. Puntland in the north is a semi-autonomous state and Somaliland is a functioning state in all but name. But Somaliland is not immune from the militant brand of Islamism that afflicts other parts of Somalia.

In 2008, suicide car bombings left dozens dead in Hargeisa, as well as in Puntland.

The leader of the main Islamist group al-Shabab, Ahmed Cabdi Godane – who is himself from Somaliland – was blamed for the attacks.

“We are on our guard,” President Ahmed Mohamed Silanyo told me.

“We are doing our level best to encourage young people through education and work, and to engage them in useful activities instead of going to extremist groups like al-Shabab.”

Somaliland is seen as a transit route for militant groups going into Somalia proper, and the government here is keen to assist international efforts to tackle this.

Although Mr Silanyo has been applauded for his efforts since taking office in July, this has not given him the international recognition he craves.

Referendum hopes

On a recent trip of Western capitals to press Somaliland’s case, he told me that it deserved to be seen as an independent country.

Somaliland is relatively free from the violence plaguing the rest of Somalia

Historically, it was a different country from Somalia, which was divided by the French, Italian and British colonial powers, he explained. Somaliland was British and was independent for five days in 1961, before it opted to join the rest of the country.

Those five days though are crucial in legal terms to the government and gives it a basis to claim it was once an independent state.

Ethnically, the people I encountered in Somaliland are no different from their brethren elsewhere, but their lives in the last 20 years have been relatively free from the violence and divisions that have plagued the rest of Somalia.

Now President Silanyo feels that with Southern Sudan likely to become independent, the people of Somaliland cannot be denied the chance of their own referendum to vote for secession.

The key question for the intentional community is whether it should be allowed to go it alone, or be forced to remain part of Somalia to help bring greater peace and prosperity to a country that has known only war for two decades?