Over the past decades, remittances have been the single largest contributor of life saving money to Somalia. Of the approximately $1.3 billion sent to Somalia every year in remittances, $350-400 million of that goes to Somaliland, helping over 40% of the population meet their basic needs.
Unfortunately, the flow of remittances from the United States and the United Kingdom is currently under threat due to fears related to terrorism funding and other financial crimes.
In an effort to try and ease those fears and brainstorm ways in which we can lessen the risks involved, the Bank of Somaliland hosted a one-day conference in Hargeisa, Somaliland, on August 6th on the theme of ‘Remittances, Compliance and Financial Crime.’ I had the privilege to attend that meeting on behalf of Adeso, and by the same token visit Somaliland for the first time.
The Vice President of Somaliland delivered the opening remarks, with many ministers also present. The Vice President spoke of the need to preserve the lifeline and work with those in the banking sector to address the current trend of account closures. The highlight of the conference was the presentation of the draft Anti-Money Laundering Act, by the Governor of the Bank of Somaliland, Abdi Dirir Abdi. “The purpose of the Anti Money Laundering Act is to prevent and prohibit the use of the financial system for money laundering or the financing of terrorism. The Act recognizes that money laundering is a criminal offense,” explained Mr. Abdi.
I thought that the conference was a very productive one; all of the ministers that spoke contributed new and thoughtful information from the perspective of their individual ministries. What I found most compelling was that it was clear that the Somaliland government and in particular the Bank of Somaliland had put in a great deal of thought on how to ease the anxiety of the western banking sector.
In addition to the new anti-money laundering law that was introduced, the government announced it was working on a national identification system that will greatly lessen the potential for fraud or other illegal dealings.
Representatives from the World Bank spoke on the importance of the remittance flows, as well as how Somaliland is joining a global anti-money laundering system. This system enables cross-border communications and information sharing about international financial crime.
It was also very heartening to hear about the number of people whose lives are completely dependent on remittances and how they will be affected if these were to be cut off. Everyone at the meeting was extremely committed to making sure that the flow of life saving remittances remains open, and doing everything they can to create the systems needed to make that possible.
Want to know more? Have a look at this infographic we recently produced.