Remittances to Kenyans are ‘most at risk’, Somalia warns

Politics and policy

A money exchanger counts Somali shilling notes on the streets of Mogadishu on October 23, 2013. Kenya has revoked the licences of 13 Somali remittance firms. PHOTO | FILE  AFP / AU-UN IST PHOTO

By REUTERS and BDAfrica.com REPORTER

In Summary

• Those affected include market leader Dahabshiil, used by 95 per cent of international agencies in Somalia.
• The government has also frozen the accounts of 86 people and entities suspected of helping finance terrorism.

Kenya has suspended the licences of 13 Somali remittance firms following the massacre at a university last week, Somalia’s central bank governor said.

He, however, added the move will hurt Kenyan Somalis more than his fellow countrymen and likely not help in the fight against terrorism.

Those affected include market leader Dahabshiil, which is used by 95 per cent of international agencies and charities in Somalia, as well as smaller players like Kendy, UAExchange, Amal, Iftin, Kaah and Amaana.

The government has also frozen the accounts of 86 individuals and entities suspected to be financing terrorism in the country.

The killing of 148 students in Garissa by Somalia’s Al Shabaab has piled pressure on President Uhuru Kenyatta to deal with the Islamists, who have killed more than 400 people in Kenya in the last two years.

Somalia’s central bank governor Bashir Issa Ali told Reuters that 13 Somali money transfer firms have been officially notified by Central Bank of Kenya (CBK) about the closure of accounts. He said the move would devastate Kenya’s Somali community, numbering just over one million people.

“It’s going to hurt Somalis in Kenya more than Somalis in Somalia. The amount of money sent from abroad to Kenya is huge,” Ali said, pointing out that many Somalis in Kenya rely on relatives abroad for basics, including school fees.

There are several alternative transfer methods available for Kenyans, however.

The owner of one Somali money transfer firm told Reuters the Kenyan government has not suspended remittance firms’ bank accounts but that the CBK had instead revoked their licences.

“Last night we simply received a notice, without discussion and without informing us (beforehand),” said the owner. “This is not the way to fight terrorists.”

Foreign Minister Amina Mohamed told Reuters on Tuesday told Reuters that Kenya is seeking additional foreign intelligence and security help after the Garissa massacre, the deadliest attack in Kenya since al Qaeda bombed the United States embassy in 1998, killing more than 200 people.