5 October 2013

Somalia: Hawala Shutdown - A Blow to Somalia Residents!

Photo: Capital FM
A survivor is carried out of Westgate Mall in Nairobi, Kenya, where armed gunmen opened fire and reportedly killed up to 30 people and wounded dozens.


As the most preferred money transfer system for Somalis living in the Diaspora to their relatives in Somalia, many residents of Mogagadishu' Capital and all Somalia fear for the worst as the noose gets tighter around their wallets.

Aamina Abdi is worried that her family will be reduced to paupers when the directive issued by the British government starts to bite Together with her three children Mariam Abdi depends on Hawala services, an alternative remittance system that exists outside conventional banking, for their survival. Hawala is facing a major test after the British government moved to shut it down citing that the alternative remittance system is being used in transaction on behalf of and sending of money to armed groups such as Alshabaab in Somalia.

"We have been depending on the service ever since and now we are worried more than ever," said Mama Mariam.

Barclays is the last big UK bank providing services to hawala money transfer companies. Most of the remittances channeled through hawala are used by families to cover basic expenses such as food, clothing, education and medical care. Most remittances come from Europe and the America.

The British government directive to close the accounts belonging to the hawala network in Barclays Bank has caused an outcry from both local Somalis and those in Diaspora who warned of the loss of a lifeline for millions of their relatives in Africa and around the world.

"We recognize and appreciate the efforts of the international community in dealing with issues of insecurity in Somalia but hawala is our lifeline," Mariam said. Jamila Hassan's kids may miss school due to lack of school fees and the family.

Thrown out of their rented house when she can't receive money from her kin in Europe.

"They help me pay kids' fees, medical and rent; who will provide me with this if you shut it down? She poses. Apart from helping families, hawala system also provides employment to thousands of people across its area of operation in the five major continents particularly in America, Europe and Africa and if the British government's

directive is implemented it will greatly impact on massive job loses. Mohammud Ali A worker in one of hawala premises in Mogadishu says that the news of the shutting down of hawala network sent panic to the users have are now not sending or receiving money.

He has worked for hawala for five years and says there was never a time when their offices was cash strapped as it how now been.

"We are doing little processing of money since the news of shutting down the system was announced. Customers are afraid of losing their money."

Somali community leaders including the pioneers and owners of hawala businesses together with some nongovernmental organizations converged in Mogadishu recently last week to discuss how they are going to be Affected by shutting of hawala across the world.

British based NGO Oxfam, which operates in Somalia, has warned of dire consequences if the plans to shut down hawala go ahead saying that lives of millions of people in Somalia will be affected and urged the international community to intervene in solving the problem.

It is estimated that over 40 per centof Somali population will be affected. Somalis in the Diaspora send billions of Dollars to about 3.8 million people every year. Citing concern over falling foul of regulations against money laundering,

Barclays Bank said in June that it planned to withdraw its services to about 250 money-service businesses. It initially gave a July 10 deadline and after an outcry by Somali remitters, academics and some MPs, the deadline was pushed back to September 30.

Many Somalis still hope that an amicable solution will be found in the near future.

More on This
Solutions to Problems Lie in the Country

Prime Minister David Cameron of Britain has convened a big international meeting on Somalia. see more »

Copyright © 2013 Dalsan Radio. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.