Remittances to Somalia survive another day in the UK

Somali activists on the "Boris bikes."
Somali activists on the “Boris bikes” in London.
Oxfam GB

Somali campaigners rode through the city of London last month on the Barclays bank-sponsored “Boris bikes” to protest the bank’s decision to cease its cash transfer work in Somalia. The bank did not change its mind, but the campaigners won an important victory this week.

Barclays bank’s plan to cut the legs from the remittance flow in Somalia was temporarily halted by a court injunction.

Dahabshiil, an Emirati cash transfer company, is challenging the decision by Barclays to cut off remittances in response to concerns over money laundering and the funding of terrorists. Supporters of the transfers, including Dahabsiil, point out that the overwhelming majority of the money is sent to support individuals and families. The estimated $1.3 billion that is sent in the form of remittances to Somalia has a major economic impact on the country.

Somalis living abroad who send money home to Somalia will continue to do so until the UK high court finishes hearing the case against Barclays.

“We enable Somalis to help themselves, by sending money to every corner of the Somali territories to enable relatives and friends to buy food, medicine and to pay for education,” said Dahabshiil following the announcement. “Remittances are also used for investment in business start-ups and property, remittances are helping Somalis get the country back onto its feet.”

NGOs like Oxfam have campaigned heavily against Barclays action. Director of Campaigns and Policy Ben Phillips welcomed the announcement through a short release.

“The ruling provides a small window of opportunity for Somalis living in the UK to send money home to loved ones in one of the poorest countries in the world.  However, this does not solve the problem – a long-term fix is needed to safeguard hundreds of thousands of people relying on the money for food, medicines and education,” he said.

Advocates say that Somalia and the firms that work in the country should be given the time to meet the regulatory demands of the UK and Barclays. Thus far, they have been given little opportunity to make such a change. Barclays significantly scaling down its cash transfer support in Somalia would be a major blow to the still-recovering country.

All other major banks have already left Somalia. Campaigners are holding on to the last hope that Barclays will change course or be forced to stay. The change, which was supposed to happen months ago, has already seen delays to its implementation. The injunction is the latest reprieve for campaigners.

“As Somalia continues to recover from two decades of unrest, these remittances remain an essential source of income for more than half of all Somalis,” said Somali Prime Minister Abdi Farah Shiridon following the announcement of the decision. “To many these remittances pay for a basic standard of living.”

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Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.