By Tristan McConnell 

Hargeysa, Somaliland, July 11, 2009 — What began as a way for exiled Somalis to send money to relatives at home has become a company that almost single-handedly keeps the entire war-torn country afloat.

“Remittances are a lifeline to Somalis,” said Abdirashid Duale, chief executive of Dahabshiil, at his Hargeysa headquarters. “They are the main income people here receive.”

Dahabshiil, a family-owned money transfer company, is a household name among Somalis. It is also Somalia's economic linchpin connecting the wealthy diaspora with the impoverished homebodies.

In Dahabshiil’s headquarters, the uneven staircases, woozily slanting walls and off-kilter balustrades lend the office a half-finished feel. Duale, a fast-talking and broadly smiling man who lives between London and Hargeysa, sweats in the heat despite the air conditioning whirring in the background.

The office has the relaxed charm of many a family-run African business. Duale’s father, Dahabshiil’s founder, shuffles by in his sandals, a length of printed material wrapped around his waist and a short traditional walking stick tucked under his arm as he makes his way to a private office on the roof where he sits cross-legged on the floor in front of a computer.

It is all a far cry from Western Union’s Colorado headquarters or Moneygram’s in Minnesota. But then Hargeysa is an unlikely place to find a multi-million dollar financial services company.

The heat is stultifying, the dusty streets filled with potholes, battered cars and ambling pedestrians. The tangled birds’ nests of wires that cling to every telegraph pole are testament to the recent boom in telephone connections. Informal stalls that sell imported goods and Ethiopian-grown khat, a popular plant chewed as a stimulant, line the roads. Money changers sit behind bricks of local currency.

The Dahabshiil name is ubiquitous: etched into concrete posts that mark crossroads, emblazoned on spare wheel covers on the back of 4x4s and stuck on signboards outside shops and offices offering money transfer services.

The World Bank estimates that remittances worth around $1 billion a year reach Somalia from emigres in the U.S., Europe and the Gulf states. And industry experts reckon that Dahabshiil may handle around two-thirds of that and as much of half of it may reach the semi-autonomous region of Somaliland.

When Somalia’s military government collapsed in 1991, the rebel army in the country's northwest unilaterally announced its secession from Somalia. The rebel leaders reverted to the colonial borders and the old British name Somaliland but no other country has recognized the country, leaving it in legal limbo and financial isolation.

Without World Bank and International Monetary Fund engagement, Somaliland struggles. Foreign minister Abdillahi Duale (no relation) explained: “We are a very poor country operating in a very difficult environment with the lack of recognition … we rely on our own resources and revenues.” The entire government’s budget is less than $50 million a year.

Dahabshiil aims to allow the more than a million Somalis spread across the world to have a quick and easy way to send money home. With one-tenth of Somalia’s population emigres, the country has become a nation without borders, the vast majority of its people’s spending power
earned overseas.

Economists have referred to the chaos of Somalia as “an economy without a state” as business goes on without a functioning government.

It is a description that Dahabshiil’s Duale welcomes.

“We need less government. We had the experience of the Siyad Barre government [until 1991] that wanted to control everything, so the culture in Somaliland is to be open … to have less government control,” he said. “Somalis still want to be nomadic, they want to go anywhere
they like and do business wherever they like.”

Dahabshiil has grown with the diaspora. The money transfer, or hawaala, business is rooted in traditional networks of kinship and trust, using clan allegiances to guarantee the near-instant transfers.

“Everything relies on trust here,” Duale said.

With the start of a civil war in 1988 that led to Somaliland’s secession, the hawaala business of Duale’s father grew charging a commission to enable Somalis get money to their relatives in refugee camps in Ethiopia.

Today identifying information still includes details of clan membership but the traditional networks have been updated with modern technology including online money transfers and SMS notification.

Dahabshiil’s growth accelerated after 9/11 when the U.S. government shut down its biggest competitor, Mogadishu-based Al Barakat, on suspicion of helping fund terrorism. The new regulations have caused Dahabshiil to migrate from the informal to the formal sector.

The company now has 1,000 agents in 40 countries and is the largest private sector employer in Somalia with 2,000 workers in more than 200 offices.

Duale admits that the collapsing world economy has hit remittances from the West. “People from Britain and America are sending less, just the basic amount say to pay school fees, not the amounts they used to send to build houses or to invest in businesses.”

Duale intends to make Dahabshiil’s foreign exchange, banking and mobile phone businesses as popular among Somalis as the money transfer business. His ambitions are perhaps most clearly seen in downtown Hargeysa where a huge new Dahabshill bank is under construction.

“Very soon people will be able to go to a Dahabshiil ATM in Hargeysa and withdraw money. Very soon we will offer a lot of the products you can get in London here in Hargeysa. Why not?” asked Mr. Duale. “The technology is here, the money is here. I believe everything is
possible.”

Tristan McConnell and Narayan Mahon traveled to Somaliland on a grant from the Pulitzer Center on Crisis Reporting.

Source: GlobalPost, July 4, 2009

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