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Cutting Somalia’s remittance “lifeline”

Posted by African Press International on July 5, 2013

Somalia’s economy depends on remittances from abroad

NAIROBI,  – By withdrawing banking services from more than 250 money-transfer companies, Britain’s Barclays Bank risks severing an essential lifeline for millions of people in Somalia who depend on remittances from relatives in the UK, warn humanitarians, rights activists and academics.

For most of the remittance firms, the move is set to come into effect on 10 July, although an extension of 30 days has been granted to some of the companies.

Barclays said there was a risk that some of the firms might be “unwittingly facilitating money laundering and terrorist financing”.

Companies set to have their Barclays accounts shut down – effectively ending their UK operations – include one of Africa’s largest remittance firms, Dahabshiil. While countries other than Somalia may also be affected, ongoing humanitarian challenges in the nation and the absence of a formal banking system there mean that Barclays’ decision could have devastating consequences.

“A huge number of Somalis rely on remittances, which are estimated to be as much as US$1.2 billion every year – more than the entire humanitarian operation in the country,” Philippe Lazzarini, the UN’s top humanitarian official in Somalia, told IRIN. “It is not an overstatement to say this move will cut a lifeline for essential services in Somalia.”

Humanitarian fall-out

An “urgent appeal” to British Prime Minister David Cameron, issued on 1 July by 185 Somali civil society groups, said the move was likely to have “dire consequences” in Somalia “where no alternatives to the money service businesses exist.”

“We are seriously worried that without the services of these money transfer organizations, Somalis living in the diaspora throughout the UK… will not be able to send desperately needed support home to their relatives. This will have immediate and severe humanitarian implications,” the appeal added.

Four leading international aid and development NGOs have this week written privately to Barclays asking the bank to reconsider its decision, warning of significant humanitarian fall-out.

According to Senait Gebregziabher, Somalia country director at Oxfam and one of the signatories of the letter to Barclays, stopping the transfers would see many more Somali families “fall back into crisis”. Somalia is still recovering from a famine that killed some 260,000 people in 2011.

A report soon to be published by the NGOs Oxfam and Adeso estimates that members of the Somali diaspora in the UK send over 100 million pounds ($152.5 million) to Somalia every year.

These remittances are reportedly second in total value only to those sent back from the US.

Far-reaching effects

The NGOs’ research suggests that remittances account for around 60 percent of the recipients’ annual income, with money mostly being used to cover basic household expenses.

Mogadishu resident Halima Mohamed and her family depend entirely on financial support sent through money-transfer firms by her two sons in Britain and Denmark.

“My sons send $300 dollars each month, which we use to cover our basic needs like food, water and rent. Three of my children are at school, while one attends university, and we’ll find it hard to cope with the situation if Barclays proceeds with its decision,” she told IRIN.

Remittance firms serving Somalia have developed systems that help them operate in a country with no formal banking infrastructure. Using bank transfers where possible, the firms also use non-bank financial transfers based on trust and social solidarity, commonly known as ‘hawala’, meaning “transfer”. This system has become vital both for the delivery of support to families for business development. Aid groups rely on these systems as well.

Remittances account for more than a billion dollars every year

“While this suspension will not affect our local transfers, it is worth noting that the UN and many of the large relief and development organizations use hawala money transfers to pay their staff, procure assistance, and implement very successful emergency aid and poverty-relief programs such as cash-for-work,” the UN’s Dawn Blalock Goodwin told IRIN.


For Barclays, the question is one of compliance with international financial regulation and potential risk to the firm – both in terms of reputation and possible legal penalties from the US and other jurisdictions.

“As a global bank, we must comply with the rules and regulations in all the jurisdictions in which we operate. The risk of financial crime is an important regulatory concern, and we take our responsibilities in relation to this very seriously,” said Daniel Hunter, spokesperson for Barclays.

“It is recognized that some money service businesses don’t have the proper checks in place to spot criminal activity and could unwittingly be facilitating money laundering and terrorist financing.”

“Abuse of their services can have significant negative consequences for society and for us as their bank. We remain happy to serve companies who have strong anti-financial crime controls, but are asking the others to find another bank. This is solely about the company’s controls, not where they send money to,” he added.

The Barclays decision follows HSBC’s payment last December of a record $1.9 billion fine to settle accusations from US prosecutors that it had failed to implement anti-money laundering controls and allowed terrorists to move money around the financial system. The UK’s financial regulator also warned British banks on 1 July that they were not doing enough to protect against financial crime, saying they could face punishment for failing to spot abuses such as sanctions violations or terrorist funding.

In 2011, two Somali women in Minnesota were convicted of funnelling money to Al-Shabab militants using hawala brokers, and a Somali website, Sunatimes, has made allegations linking Dahabshiil to the Somali Islamists. Dahabshiil strenuously denies the claims and is taking the Somali journalist who runs the website to court.

Moving underground

But some argue the move by Barclays will shift legitimate transfers to murkier channels.

More than 100 academics and aid practitioners wrote to the British government last week to protest Barclays decision, warning that closing down money transfer channels “will only encourage people to send funds through illegal, unsafe, and untraceable channels, thereby potentially making the problem of support to proscribed parties much more serious”.

The view from Dadaab
While the threat to remittance flows into Somalia has provoked the greatest outcry, there is also concern about the impact on Somali refugees in neighbouring Kenya.

According to hawala companies operating in the 20-year-old Dadaab camp, which houses two-thirds of Kenya’s 500,000-strong Somali refugee population, more than a third of camp residents depend on remittances sent from abroad.

“What we receive from aid agencies is not enough, so if these remittances are closed or scaled down, our main source of support will be cut off,” Fatuma Mohamed Ali, a mother of eight who receives money from her relatives in the UK and Denmark, told IRIN. “I started a business with the money my daughter sent me.”

Refugees are not allowed to move out of the Dadaab complex, but many manage to run thriving businesses in the camp by using remittance money to contract people to buy goods for them in Garissa, Nairobi and Mombasa.

A Dahabshiil official, who did not want to be named, said: “In addition to the refugees, some of the aid agencies operating in Dadaab use our services, as the security situation make it difficult for them to carry cash around. Every month, we pay salaries to hundreds of staff as well as transfer other money to pay for agency operations. As you can, these hawala firms are a lifeline for the Dadaab camps.”

“We are regulated by the UK government. We are a licensed institution as is any other legal company,” Abdirashid Duale, CEO of Dahabshiil, told IRIN.

“Dahabshiil’s anti-financial crime controls are fully compliant with all applicable legal requirements and industry best practice and have been regularly audited by HMRC [the UK’s customs and tax department] for a number of years (on behalf of the FSA [Financial Services Authority]), without any adverse findings.”

“There is no other bank willing to open an account for us in the UK,” Omar Abdinur, managing director of Tawakal UK, another remittance firm affected by the decision, told IRIN.  “We have approached many banks but they are not willing. They say that money transfer is a risky business, but there is no single case in the UK where it has been proved that our firms are under-regulated or that we have transferred money to people under sanctions.”

Government response

Somali President Hassan Sheikh Mohamud has also called on Barclays to reverse its decision, stressing that the country is at a turning point “after two decades of chaos”.

“We understand Barclays’ corporate responsibility and its duty to its global customers to maintain a reputation for tackling financial crime, but that does not have to mean pulling the rug from under the feet of people battling extreme poverty – and before our fledgling government can step in to help,” he said in a statement last week.

Though faltering in its recovery – with some 10 percent of its population still reliant on humanitarian aid and violence ongoing in parts of the country – Somalia is seen as taking some steps in the right direction, a transition in which the UK is playing a key role.

In May, UK Prime Minister David Cameron, with President Hassan, hosted the second London Conference on Somalia, at which international donors pledged some $300 million in assistance.

But remittance flows to Somalia remain the country’s highest foreign exchange earner, and are a vital revenue stream. Any drop in remittances would throttle signs of economic recovery, analysts say.

“Somalia is almost entirely dependent on remittances, and if the closures come into effect, this could cause a humanitarian crisis as well as economic stagnation,” Somali economist Professor Yahye Amir told IRIN.

Extending the central bank’s reach and introducing banking regulation are among the government’s many priorities. Normal bank transfers, such as SWIFT, are not currently possible.

“Because Somalia’s crisis has been so prolonged, families have little ability to absorb shocks such as floods, droughts, disease outbreaks, displacement, a poor harvest or, in this case, an economic shock,” said the UN’s Lazzarini.

“The key thing to realize is that when humanitarian needs are assessed, remittances are already factored in. So a withdrawal or disruption of remittances will likely increase the number of vulnerable households or, for already vulnerable families, increase their need for humanitarian aid,” he said.

“With no formal banking systems as an alternative, we know from our experience on the ground that if remittances from the UK to Somalia were to be halted, many more families would fall back into crisis.”

The UK’s Foreign and Commonwealth Office (FCO) noted in a statement the “important role” played by remittances “in supporting the economy and people of Somalia”. But an FCO spokesperson also said that “Barclays’ decision is ultimately a private commercial matter”.

zf/am/rz source

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President Kenyatta and Deputy President Ruto has nominated cabinet secretaries

Posted by African Press International on April 25, 2013

< President Kenyatta with Amb. Raychelle Omamo

Kenya‘s President Uhuru Kenyatta and his deputy William Ruto has nominated members of his cabinet. Those nominated now wait for vetting by Parliament.

The Kenyatta – Ruto government will have 18 ministries including two that fall under the offices of the president and the deputy president.

President Uhuru Kenyatta will be in-charge of the National Government while Deputy President William Ruto will be in-charge of the Devolved units. The two men are determined to have a lean government. The constitution allows the appointment of not less than 14 and not more tan 22 cabinet secretaries but they opted to have 18. This is avery good sign of things to come because by reducing the number to 18, they are thinking economics – the burden to the tax payer.

Here below are the nominees as cabinet secretaries:

  • Fred Matiang’i (Information, Communication and Technology)
  • Henry K. Rotich (The National Treasury)
  • James Wainaina Macharia (Health)
  • Amb Amina Mohamed (Foreign Affairs)
  • Adan Mohammed (Industrialisation)
  • Ann Waiguru (Devolution and Planning)
  • Davis Chirchir (Energy and Petroleum)
  • Amb Raychelle Omamo (Defence)
  • Eng Michael Kamau (Transport and Infrastructure)
  • Phyllis Chepkosgey (East African affairs, Commerce and Tourism)
  • Prof Jacob Kaimenyi (Education)
  • Felix Kosgey (Agriculture, Livestock and Fisheries)
  • Prof Judy Wakhungu (Environment Water and Natural Resources)
  • Dr Hassan Wario (Sports, Culture and Arts)
  • Najib Balala (Mining)
  • Charity Ngilu (Lands, Housing and Urban Development)
  • Ministry of Labour, Social Security and Services (Vacant)
  • Ministry of Interior and Coordination of National Government (Vacant)

Profiles of Kenya’s Cabinet Secretaries Nominees

President Uhuru Kenyatta and his deputy William Ruto have today unveiled twelve more cabinet secretaries nominees to bring the number to sixteen out of the eighteen who will make up the new cabinet.Here are the 16 Cabinet Secretaries Nominees Amb Raychelle Omamo (Defence) Amb Raychelle Omamo (Defence)

Amb. Rachel Awuor Omamo, Ministry of Defence

Studied Law at the University of Kent at Canterbury in the UK.
Senior Counsel, has been an Advocate of the High Court of 27 years standing.

She was the First Woman Chairperson of the Law Society of Kenya
First woman Ambassador of Kenya to France, Portugal, The Holy See and the Republic of Serbia and Permanent Delegate of the Republic of Kenya to UNESCO.

Rayechelle has made substantial contribution to the advancement of the rule of law in Kenya and to the development of legislation and policy, for example:

Member of the Task Force on the Establishment of the Truth and Reconciliation Commission for Kenya;

Member of the Task Force on the Review of Landlord and Tenant Legislation;
Assisting Counsel to the Ndungu Commission:

She was the Jurist of the Year 2002. Adan Mohammed (Industrialisation) Adan Mohammed (Industrialisation)

Adan Mohammed – Ministry of Industrialization and Enterprise Development

Born December 1963 in Mandera.

Adan has worked for Barclays Bank for over 15 years in different parts of the world.  He has been the CEO of Barclays Kenya for a period of 10 years that has seen the Bank grow from strength to strength.  In recognition of his contribution, Barclays Group recently promoted him to the role of Chief Administrative Officer with responsibilities for 10 countries in Africa.

Prior to Barclays, he worked for PricewaterhouseCoopers for a period of 7 years in London where he trained as a Chartered Accountant.
An MBA graduate of Harvard Business School in the US, Adan is also a First Class Bcomm degree graduate from the University of Nairobi.

Adan is married to Nafisa and has 5 children. Ann Waiguru (Devolution and Planning) Ann Waiguru (Devolution and Planning)

Anne Waiguru – Ministry of Devolution and Planning

Ms Anne Waiguru has an academic background and experience in economic and public policy. She holds a Masters degree in Economic Policy from the University of Nairobi, and, has specialized experience in public finance, financial management systems, public service reform and capacity building, and, governance.

Ms Waiguru is the Director, Integrated Financial Management and Information System (IFMIS), and, Head of Governance at the National Treasury.  She served briefly as a Senior Public Sector Manager/ Assistant Vice President, at Citigroup NA. Previously, Ms. Waiguru served as a Technical Advisor in the Cabinet Office, Office of the President. This position was initially seconded by the World Bank (DC).

In the last two years, Ms Waiguru has led her IFMIS team at the National Treasury to win three Awards for exemplary performance in the Public Service. She was also nominated two years ago, as one of the Top 40 Under 40 women in the country, the only nominee at the time from the Public service.

Ms. Waiguru has been published, and has served as the Alternate to the Permanent Secretary/National Treasury in the Public Procurement oversight Authority Advisory Board, and, the Women Enterprise Fund Board. Ms Waiguru is a proud mother of three sons, Ian, Don and Wabu aged seventeen (17), fourteen (14) and nine (9) respectively. Dr Hassan Wario (Sports, Culture and Arts) Dr Hassan Wario (Sports, Culture and Arts)

Dr. Hassan Wario – Ministry of Sports, Culture and Arts

He is a Honorary Fellow of the International College of Dentists.

Previously has held several key positions such as:

President of the Commonwealth Dental Association
Head of the National Dental Unit at the Kenyatta National Hospital Felix Kosgey (Agriculture, Livestock and Fisheries) Felix Kosgey (Agriculture, Livestock and Fisheries)

Felix Kiptarus Kosgey – Ministry of Agriculture, Livestock and Fisheries

Mr. Koskei was born in 1964.  He joined University of Nairobi in 1987 and graduated with BSC Honours Degree in 1990. He did his MBA in Strategic Management in 2003 at the University of Nairobi.

He joined Kenya Posts and Telecommunication Corporation in 1990.  In 2007 he joined Kenya Civil Aviation Authority as Manager Procurement where he served for 2 years.  In 2009, he joined Kenya National Highways Authority and rose through the ranks to become General Manager, Supply Chain and Support Services.

He has undertaken professional courses in Supply Chain Management offered by Chartered Institute of Purchasing and Supply having completed his graduate diploma.

He is trained in Road Asset Management Systems and Strategic Level Planning by University of Brunswick, Canada.  He also trained in Implementing successful and Effective Public Private Partnerships in University of Botswana.

He is married to Margaret and has 4 children, 1 boy and 3 girls. Eng Michael Kamau (Transport and Infrastructure) Eng Michael Kamau (Transport and Infrastructure)

Eng. Michael S. Kamau – Ministry of Transport and Infrastructure

Born in 1958.  He is married with two children and has been in the Civil Service since 1981.  He was seconded to Moi University in Eldoret for seven years between 1990 – 1998.

He holds a Bachelor of Science in Civil Engineering from the University of Nairobi, Master of Science in Engineering from the University of New Castle Upon Tyne, United Kingdom.
He has received extensive training in the field of engineering and management both locally and internationally.

His is registered as a Professional Consulting Engineer by Engineers Board of Kenya.  He is a fellow of the Institution of Engineers of Kenya and also a fellow of the Kenya Institute of Management.  He is an associate member of the Chartered Institute of Arbitrators.

He has been a Permanent Secretary since October, 2007 and a key architect in the infrastructure upgrade in the last 10 years. Prof Judy Wakhungu (Environment Water and Natural Resources) Prof Judy Wakhungu (Environment Water and Natural Resources)

Prof. Judy Wangalwa Wakhungu – Ministry of Environment, Water and Natural Resources

Holder of a PHD in Energy Resources Management.  She is currently the Executive Director of the African Centre for Technology Studies.

She is also Energy Advisor to the Energy Sector Management Program of World Bank and Advisor at the Legatum Centre at MIT.

She is also a member of the Scientific Advisory Committee of UNESCO’s Intergovernmental Management of Social Transformation Programme. Najib Balala (Mining) Najib Balala (Mining)

Najib Balala – Ministry of Mining

Born 20th September 1967.

He served in four (4) Ministries and best was Ministry of Tourism. He was elected President of UNWTO.  Was best Minister of Tourism in Africa by the African Investor.
He has Experience in Private Business.

He attended a leadership course at JF Kennedy School of Government, Harvard University and also a course in Urban Management at the University of Toronto.

He served as Member of Parliament for Mvita for 10 years.  He is married to Najaah and have four (4) children – 2 girls, 2 boys. Davis Chirchir (Energy and Petroleum) Davis Chirchir (Energy and Petroleum)

Davis Chirchir – Ministry of Energy and Petroleum

Mr.Chirchir has a depth of experience in project development, management and execution and is skilled in strategic analysis and financial management.

He previously served as a Commissioner at the Interim Independent Electoral Commission.
Previously General Manager at Kenya Posts and Telecommunications Corporation he coordinated the restructuring of KPTC to create Telkom Kenya, Communication Commission of Kenya, Postal Corporation of Kenya and staff Pension Fund.

He also coordinated the privatization of Telkom Kenya and establishment of Safaricom.
Mr. Chirchir holds a Masters of Business Administration in International Management from Royal Holloway School of Management, University of London and a Bachelor of Science degree in Computer Science and Physics from the University of Nairobi.

He is 53 years and married with four children. Phyllis Chepkosgey (East African affairs, Commerce and Tourism) Phyllis Chepkosgey (East African affairs, Commerce and Tourism)

Phillis Jepkosgey Kandie – Ministry of East African Affairs, Commerce and Tourism

Mrs. Kandie was born in Eldama Ravine, Baringo County 48 years ago. 
In 1986, she joined St. Mary’s University, Canada for her undergraduate where she attained a B.Com (Economics) Degree.  She then proceeded to Middlesex University, United Kingdom in 1991 and Durham University, UK for her MBA and further training.

She is married to Ambassador Julius Kandie and blessed with two children, Lawrence and Simon.
She is an investment banker and is currently engaged as a Director, Investment Advisory Services at Standard Investment Bank.  She has also served as a regulator within the Capital Markets, energy and agricultural sector.

Previously, she was a Business Advisory Consultant for the SME sector having consulted for the World Bank and European Union.

She has served in several Boards including the Kenya Revenue Authority. Charity Ngilu (Lands, Housing and Urban Development) Charity Ngilu (Lands, Housing and Urban Development)

Charity Ngilu – Ministry of Lands and Urban Development

Born in Machakos District in 1952

Worked for the Central Bank of Kenya and Chase Manhattan for 10 years
Managed family businesses for 8 years.

Served as a Member of Parliament for Kitui Central Constituency for 20 years
Served as Minister of Water, Irrigation where under her leadership increased the number of people accessing safe clean water from 17 million to 24 million in 5 years.

Served as a Minister of Health, where under her leadership patients living with AIDS accessed drugs, reduced malaria infection, reduced infant and maternal mortality
Holds a BA in Leadership & Management.

Married to late Eng Michael Ngilu
Has three (3) children Henry K. Rotich (The National Treasury) Henry K. Rotich (The National Treasury)

Henry K Rotich, Ministry of National Treasury 
Age: 44  Married with two sons.

  • Holds a Masters Degree in Public Administration (MPA) from the Harvard Kennedy School, Harvard University.
  • Holds a Master’s Degree in Economics from University of Nairobi and Bachelor’s Degree in Economics (First Class Honors) from the same University.
  • Served at the Central Bank of Kenya, since 1994.
  • Head of Macroeconomics at the Treasury, Ministry of Finance, since March, 2006.
  • Work as an economist for the International Monetary Fund (IMF), Nairobi.
  • Consulted as a short-term macroeconomic expert in the region – in Mozambique, Malawi and Rwanda with the IMF’s East AFRITAC (in Tanzania) and Macroeconomic and Financial Management Institute (MEFMI) in Zimbabwe.
  • Part of designers of macroeconomic convergence criteria of the proposed East African Monetary Union Fred Matiang’i (Information, Communication and Technology) Fred Matiang’i (Information, Communication and Technology)

Dr Fred Matiang’i Okengo, Ministry of Information Communication and Technology. 
Born in Borabu Married and has two children 

  • Taught at Egerton University and the University of Nairobi.
  • Consulted previously for among others the World Bank, the Commonwealth Parliamentary Association, the Inter-Parliamentary Union and the United Nations Development Programme.
  • Immediate former Country Director of the Kenya Parliamentary Support Programme.
  • Leaving his current position as the Eastern Africa regional Representative for the Centre for International Development, Rockefeller College of Public Affairs and Policy, the State University of New York. James Wainaina Macharia (Health) James Wainaina Macharia (Health)

James Wainaina Macharia, Health 
Age: 53 Married with two children 

  • Top in class for both “O” levels and “A” Levels (Kagumo High School, Nyeri).
  • Attained Bachelor of Commerce (Hons) University of Nairobi – 1983
  • Selected by Deloitte & Touche to train as a Chartered Accountant in London, UK.
  • Qualified CPA(K).
  • Holds MBA Degree from Henley Management College, UK.
  • Joined Standard Chartered Bank in 1989, rising to become Financial Controller in 1994.
  • Worked in Zambia as Managing Director, African Banking Corporation, and later transferred to Tanzania in the same position.
  • Group Managing Director with NIC Bank from 2005 to-date Amb Amina Mohamed (Foreign Affairs) Amb Amina Mohamed (Foreign Affairs)

Amb. Amina Mohammed, Ministry of Foreign Affairs
Married to Mr. Ahmed and has two children.

  • Lawyer and diplomat by profession and has served in the public service since 1985.
  • Former Assistant Secretary General of the United Nations and Deputy Executive Director of the United Nations Environment Programme at Nairobi.
  • Former Permanent Secretary of the Ministry of Justice, National Cohesion and Constitutional Affairs.
  • Former Ambassador of Kenya to the United Nations at Geneva.
  • Served in the Ministries of Local Government, Foreign Affairs and Justice. Prof Jacob Kaimenyi (Education) Prof Jacob Kaimenyi (Education)

Prof Jacob Kaimenyi (Education)

Prof. Kaimenyi was born in 1952. He is married with 5 children.He holds a PHD in Dentistry from the University of Nairobi. He isthe first inaugurated full professor of PERIODONTOLOGY at theUniversity of Nairobi.He is currently:a)Deputy Vice-Chancellor in charge of Academic Affairs at theUniversity of Nairobi.b)A Member of the Medical Practitioners and Dentists Boardc)A trustee of Regina Pacis University College – A constituentCollege of the CATHOLIC UNIVERSITY OF EASTERN AFRICA.He is a Honorary Fellow of the International College of Dentists.Previously has held several key positions such as:

President of the Commonwealth Dental Association
Head of the National Dental Unit at the KenyattaNational HospitalNominee for Cabinet Secretary, Education.

Other Appointments are;

1. Francis Kimemia – Secretary to the Cabinet

2. Lwarence Lenayapa – Comptroller of State House

The president has said that the two remaining ministries – the Ministry of Interior and Coordination of National Government and Ministry of Labour, Social Security and Services – will be filled in the due course. 


Source PPS


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