The build up to the London conference on Somalia has focused on what doesn’t work in the Horn of Africa nation – the coastguard, the central government, the security services – but the answer to the country’s crisis lies in examining what does work, argue Somali business leaders.

Read the article – The Independent

LONDON (Reuters) – Turkey’s bold new interest in Somalia should be an example to other donor nations to give infrastructure projects as big an emphasis as traditional aid, a top Somali businessman said.

Turkish Prime Minister Tayyip Erdogan visited Somalia in August, the first non-African government leader to do so for nearly 20 years. The Turks have since opened an embassy, started work on the international airport, offered Somalis university places in Turkey and made plans to build a new hospital.

Abdirashid Duale, arguably Somalia’s most influential businessman, says several legitimate sectors of the economy are thriving, and a can-do merchant elite can help bring peace by building badly needed roads and airports and providing jobs.

All that is needed are outside investors who can see economic potential in what is often dismissed as a failed state, and Turkey is ahead of the pack in exploring ways to engage economically, said Duale, chief executive of Dahabshiil, an international money transfer business.

“I think the Turkish have changed the (development) environment, they’ve changed the landscape. They want to invest,” he told Reuters in an interview.

“The Turkish business communities are going to Mogadishu and I’d love to see Turkey going to all the other Somali-speaking regions such as Somaliland and Puntland,” he said, adding that he thought Western powers were overly “cautious”.

His comments echo those of Western officials who say they admire the ability of Turkish donors and businessmen to operate in areas of Somalia seen by Europeans as excessively risky.

The need for a new approach to foreign help is urgent, many agree. Humanitarian and development aid to Somalia since civil war engulfed Somalia in the 1990s amounts to $13 billion, including the cost of housing Somali refugees in other countries, according to a September 2011 joint report by the One Earth Foundation and the Center for American Progres.

Another $7 billion has gone on military responses, diplomacy and counter-terrorism, says the report. It notes nevertheless that Somalia’s “cycle of conflict and despair” remains unbroken.

Dahabshiil is one of number of companies that have thrived despite paying huge costs for private security. These include success stories in livestock, agriculture, aviation, construction, port management, communications and hotels.

Speaking to Reuters at a branch of his global money transfer network in the east London district of Whitechapel, Duale says the resilience of Somalia’s astute commercial class is all too seldom recognised by international gatherings on Somalia such as one on Thursday in London aimed at plotting a path to peace.

Business is absent from the To Do list posted online by organisers of the multinational meeting, where politicians and diplomats including U.N. Secretary-General Ban Ki-moon and U.S. Secretary of State Hillary Clinton will discuss the politics of Somalia’s two-decade old crisis.

Duale suggested the omission was regrettable.

“The London conference is not talking about investments, it’s not talking about those who are trying to help themselves,” he said. “I’m suggesting they have to work with the business community, those who have a reputation inside, on the ground, someone who Somali people can relate to.”

The meeting’s British organisers say they have noted Turkey’s new prominence and will encourage Ankara and other new donors to pursue their more adventurous approach.

Erdogan’s visit was an example of the growing influence of non-Western donors in African and Asian development efforts, where countries such as Turkey and Qatar are bringing fresh funds, a different mindset and their own experience of managing natural disasters to the humanitarian scene.

“You need roads, airports, infrastructure. That’s where the international community can help,” Duale said. “If you have weak infrastructure, things take longer. Farmers cannot travel, traders cannot do business on time. If investors work with businesses, these things become possible.”

Traditional Western donors who sometimes find it dangerous or difficult to work in areas infested with armed gangs instead “should start with what works, and emphasise the positive”.

Dahabshiil is the conduit for most of the estimated $1.6 billion in remittances that flow into the country from the diaspora annually. Founded by Duale’s father Mohamed in 1970, Dahabshiil says it employs more than 5,000 people across 150 countries and is the largest money transfer business in Africa.

Speaking ahead of the London Somalia Conference, to be chaired by British Prime Minister David Cameron, Abdirashid Duale, CEO of Dahabshiil, Africa’s largest money transfer business, said: “Somalis have high hopes that the international community will develop a concrete plan to improve the region’s future.

“The key to unlocking Somalia’s potential is international investment in social entrepreneurship and education. It will help Somalis help themselves by teaching them how to create new business opportunities, more jobs and a more sustainable economy. These practical alternatives will protect vulnerable Somalis, particularly younger generations, from the pressure put on them by extremist groups linked to piracy and terrorism.

“As the Somali proverb goes ‘the worst man is he who never sows, never consults and never economises’, meaning that our communities most value those that use their minds or assets to help themselves and others.”

The conference, organised by the Foreign and Commonwealth Office, will be attended by more than 40 governments and international organisations, including the United Nations, African Union, European Union and the World Bank. Somali officials, including the Presidents of the Transitional Federal Government (TFG), Somaliland, Puntland, Galmudug and Ahlu Sunnah wal Jamaah will also be in attendance.

To be held at Lancaster House on 23 February, the conference aims to deliver commitment and coordination for a new international approach to tackle Somalia’s problems of terrorism, piracy, food shortage and the political vacuum affecting the region.

Addressing an audience of Somalis at Chatham House recently, UK Foreign Secretary William Hague said he was confident the conference would mark a turning point by “putting the needs of Somalis front and centre.” Hague also emphasised that solutions must be Somali-led. “We can help get Somalia on its feet – we cannot do the running for it”, he said.

Mr Duale added: “The conference addresses issues that are highly political, but if the Somali region is to be rehabilitated, then its business community – domestic and international – must be central to any agreed plan. Diaspora-led businesses in Somalia play a crucial role in bringing expertise and investment to the private sector.

“Those Somalis with the most at stake, who understand the many complex issues first-hand, tend to be those who live and work within the region. In pursuit of sustainable development, stability and effective government, multi-lateral organisations such as the African Union, UN, EU and World Bank need to find ways to help these various groups play to their strengths.”

Dahabshiil, which handles the majority of the $1.6bn remitted to Somalia by its diaspora, has a long history of partnership with international organisations, supporting development initiatives and providing financial services to 95% of NGOs operating there. Dahabshiil Group spans money transfer, banking and telecoms, and employs around 5,000 people within Somalia itself, across regional and clan lines.

As part of a wide-ranging corporate social responsibility programme financed by 5% of its annual profits, the company funds the main hospital in Mogadishu and is a major donor to healthcare programmes throughout the Horn of Africa. At the height of last year’s drought, Dahabshiil donated over US$200,000 to the relief effort and called for other businesses to follow suit. The firm contributes to infrastructure projects and makes regular donations of cash and equipment to schools and universities throughout the region.

Mr Duale believes that alongside business growth it is imperative that Somalis have access to a good education. He said: “There are now ten universities in Hargeisa and an increasing number of young people are choosing to pursue further education within the Somali regions instead of leaving. It is vital that we, alongside the international community, continue to make strenuous efforts in education as it will play a vital role in the development of a sustainable economy.”

It is increasingly recognised that the Somali youth represent a great challenge both in the diaspora and in the region itself. The international community has already stepped-up its efforts to engage disenfranchised young Somalis in the UK, Mogadishu and elsewhere, with part-government funded organisations such as the London Somali Youth Forum playing a particularly active role.

Referring to recent actions of a Minnesota bank in the US, which stopped money transfers to Somalia in fear of prosecution under US anti-terror laws, Mr Duale expressed his concern for those who rely heavily on remittances to survive.

He said: “Annual remittances to the Somali region are greater than funding from international aid. The flow of financial and human resources between the diaspora and the domestic population is crucial to sustained development, and the international community should not obstruct the efforts of Somalis to help themselves, whether it’s by sending money or by travelling to and from the region.”

Following the global media’s recent focus on the international impact of piracy and terrorism, Mr Duale was keen to highlight the effect on day-to-day business in the region itself.

“The threat of piracy and insurgent groups translate to increased business costs, such as insurance, shipping and internal security for firms trying to operate in these areas. Greater stability and continuity in the Somali government is a prerequisite to any long term solution. The conference must lay the foundations for this, as businesses are currently at the mercy of the government’s constantly changing nature and its lack of effective authority.”

Looking ahead, Mr Duale believes that to secure a brighter future for all Somalis it is imperative the international community help to build better infrastructure – citing roads and hospitals as necessary sources of investment. He also believes that Somalia would benefit from greater UN involvement, including closer collaboration with the private sector and greater investment from Turkey, the Middle East and other members of The Arab League.

Mr Duale also welcomed the recent aid from international donors, but said further humanitarian support is still required.

The BBC’s Dan Damon spoke to the chief executive of Dahabshiil, Abdulrashid Duale

It is estimated that around one third of Somalia’s income comes from remittances sent by Somalis living abroad.

Much of that money comes in via Dahabshiil, one of the largest money transfer businesses in the world.

Its operation centre is in Hargeisa, the capital of the self-declared republic of Somaliland.

WATCH: http://www.bbc.co.uk/news/world-16944631

Abdirashid Duale, CEO of Dahabshiil, addressed an audience at the London School of Economics on the challenges and opportunities of delivering financial services to developing countries.

The event, ‘Delivering Money in Difficult Places’, was organised by the Microfinance Club UK – an independent organisation that promotes best practice in the delivery of microfinance to poor communities around the world. It was held in collaboration with the London School of Economics Development Studies Institute (DESTIN), and chaired by Tom Sanderson, CEO of Five Talents – a microfinance charity that provides loans and training funds to groups of entrepreneurs in Africa, Asia and South America.

During his talk, Mr Duale encouraged the audience – which included bankers, microfinance specialists, academics, LSE students and media representatives – to recognise the significant progress being made to increase financial stability in developing countries. He stressed the comparative stability of large areas of the Somali region – citing growth in businesses and industries as well as improved education and employment prospects.

Mr Duale also discussed the difficulties faced by organisations operating in the Somali region and beyond, explaining how Dahabshiil has been able to overcome these challenges to become a global brand. Mr Duale said: “The trust and goodwill of local communities are central to the company’s success – both to its operations and in helping to guarantee its security as an organisation.”

Dahabshiil’s money transfer network reaches some of the most remote locations in the Horn of Africa and parts of East and Central Africa, extending a lifeline to those most often affected by chronic poverty, instability and other problems. During the current food crisis, Dahabshiil has partnered with leading aid agencies in the delivery of a ‘cash for food’ programme, involving cash transfers to beneficiaries for the purchase of food in local markets. Dahabshiil is currently progressing initiatives in partnership with development organisations to develop sustainable financial products to meet the needs of poor communities.

Mr Duale asserted that innovations in technology and delivery, whether for commercial or humanitarian ends, are best introduced alongside established methods. In its remittance business, Dahabshiil exemplifies this mix of old and new – combining the latest developments in telecommunications with the use of traditional Somali networks to locate and verify clients.

In his closing statements, Mr Duale highlighted the continued importance of remittances and the central role they play in fuelling economic development. The World Bank estimates that $1.6 billion is remitted to the Somali region each year. Of this annual inflow, research shows that approximately one third is invested in private enterprise.

As well as providing a lifeline for individuals, families and businesses, Dahabshiil serves over 95% of international organisations working in Somalia – including the United Nations, World Health Organisation, World Bank, Oxfam, Save the Children and Care International. The United Nations has described Dahabshiil as, “the only safe and efficient option to transfer funds to projects.”

Following the event Tom Sanderson, CEO of Five Talents, said:

“Microfinance is already enabling some of the poorest Somalis to plan for the future and to be more resilient to the shocks of conflict and famine. The expertise of companies like Dahabshiil and their experience of working in such regions will be essential if these innovations are to live up to their early promise.

“We recognise the significant role played by the diaspora in fuelling economic growth, and its vast potential for supporting fragile communities. Mr Duale’s presentation was fascinating and the audience at LSE enjoyed a lively and very informative Q&A session.”

Mr Duale concluded:

“[Developing communities] need a reliable system which ensures that money is received, regardless of where recipients live. We must promote awareness-creation and foster an enabling environment for rural remittances.

“Alongside aid initiatives Dahabshiil is committed to developing long-term solutions to the problems of poverty, and we place great value on our dialogue with organisations like the Microfinance Club UK in helping us work towards this goal.”

Representatives from key stakeholder organisations such as The World Bank, The Financial Services Authority (FSA) and HMRC came together at the GMT Summit to discuss the industry’s concerns about the PSD – which provides the legal foundation for the creation of an EU-wide single market for payments.

The PSD is set to undergo a review by the European Commission in November 2012. While the PSD has been viewed as an important step in the drive for harmonisation across Europe since its introduction in 2009, industry experts believe there must be greater clarity and set procedures for regulators. In Italy, for example, the PSD is applied to all financial transactions irrespective of the origin or destination of the funds. However, this approach differs from most other European nations where the PSD is only applied to intra-EU transactions, as such, industry leaders feel that greater clarity must be provided to ensure the rules are not exploited to serve national interests.

Read The Complete Article in All Africa

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.

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