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Somalis Fear End of US Remittances Will Empower Militants

  • Gabe Joselow

At the end of this week, citizens of Somalia will lose one of their biggest sources of money. That is when a U.S. bank cuts off cash transfers to the war-torn and famine-stricken country. Somalis in Nairobi say the move - intended to stop funding for Somali militants - will hurt ordinary people instead.

Nairobi's Eastleigh neighborhood is a center of commerce for Kenya's sizable Somali community.

Nicknamed “Little Mogadishu,” the streets are crowded with handcarts pulling cooking oil, men selling suit jackets and undershirts, and street vendors hawking a leafy narcotic known as khat.

The invisible force energizing much of this trade is a unique money transaction network, which allows the Somali diaspora to send money to family members and business partners back home.

But the so-called hawala network is about to lose a major lifeline, when a U.S. bank cuts off one of the only transfer services for Somalis in the United States.

Omar Haji, originally from Mogadishu, now lives in Eastleigh, and receives financial support from his family in the U.S. state of Minnesota.

He said that most people will see this action by the banks as an attack on Somali people rather than against al-Shabab.

He added that support for the militant group could actually grow, and businesses that typically receive money from abroad may turn to the relatively wealthy al-Shabab for financing.

The al-Qaida linked group has waged war against the country's central government for years, and has funded itself by taxing citizens in areas under its control.

Somalia's Transitional Federal Government has had some limited success driving the militants out of the capital Mogadishu in recent months. But Hassan Said Samantar, a minister of Galmudug State in central Somalia, said cutting off remittance flows could further destabilize the country.

“I find this move really very unfortunate for the Somali population at a time. Particularly at a time when Somalia is going forward with the roadmap and the security situation is improving and so on. Whenever Somalia is going forward it seems there are forces that push it back,” said Samantar.

The United States says Somali money transfer services handle up to $1.6 billion every year. And the international development agency Oxfam says about $100 million is sent directly from the United States.

Mohamed Ali Mohamud is a former Somali presidential candidate from Puntland. He now runs a borehole drilling company that operates in Somalia. He said the bigger money-wiring services have a very scant presence in Somalia and do not operate in al-Shabab controlled areas, leaving very few alternatives for cash transfers.

“Western Union or Moneygram, or whatever, they don't venture to go that area where those guys are controlling. But these Somali remittance [companies], they are taking risks. They make agreements with the local people there, for their safety, and then they make the remittances, immediately, without delay,” said Mohamud.

In addition, Western Union can charge a fee of up to 20 percent, while the hawala merchants charge between two and five percent.

Eastleigh businessman Mohamed Jamaa sells electronics, milk, biscuits and other small items that he imports from Somalia.

He said if the money is cut off at the source of the supply chain, it will immediately affect his business, and his ability to support his four sons who live at a refugee camp.

Jamaa said he gives the boys money to keep them occupied, but that if he can no longer support them, they may have no choice but to go back to Somalia and join al-Shabab.

The U.S. firm, Sunrise Community Banks, decided to shut down the money transfer service for fear it would be in violation of a U.S. counter-terrorism law if the money ended up in the wrong hands.

Somalia's Prime Minister Abdiweli Mohamed Ali is urging the U.S. government to step in to help find another solution.

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