Africa: As the Cycle of Crisis Continues in Somalia, Vital Remittance Pipelines Risk Being Cut
All Africa, 19 February 2015
Just three years on from a devastating famine that killed 258,000, Somalia continues to be in the grips of crisis. At the same time, the country's vital lifeline - $1.3 billion in remittances annually representing 25-45 percent of the country's GDP - is slowly being choked off in the US, UK and Australia, NGOs warned in a report released today, Hanging by a Thread: The ongoing threat to Somalia's remittance lifeline.
Two weeks ago, US-based Merchants Bank closed all accounts with Somali money transfer operators (MTOs). According to MTOs Merchants was responsible for transferring an estimated 60-80 per cent of remittances from the USA. Similarly, in Australia, Westpac Bank has announced that it will close Somali remittance accounts soon, and last year in the UK Barclays Bank also closed accounts of Somali MTOs.
"This is not just extra money; this is money that I need to survive on a daily basis," says Hawa Abdullahi Warsame, a Somali woman living in northern Somalia. "Not only am I dependent on it, but over 10 relatives - my entire extended family - are as well. I have sick relatives who need medication, and children that I am trying to provide an education for. This money is vital for that."
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