Concerted efforts and actions is urgently imperative in addressing the rate of forex engulfing the country as a prelude to stabilizing inflation and sustaining economic growth in Somaliland.
This appeal was made by the Dahabshiil Group of Companies Chief Executive officer Mr. Abdirashid Saeed Duale during an exclusive interview with BBC Somali service in which he mentioned the target stakeholders as the business community,banks,telecommunication companies, consumers and the government.
Acknowledging that it was the government’s responsibility to regulate ,monitor and implement good fiscal policies to control inflation through the Central Bank which are comparable to other nations, citing Kenya and Britain as good examples the government ought to emulate.
On his take on recent guidelines put in place by president Ahmed Mahmud Silanyo as per e-banking procedures as a means to curb high forex rates against the local shilling as well as institutionalize the Somaliland shilling as legal tender in the country, Abdirashid Duale Informed of his complete concurrence
Said he, “ Kenya has successfully implemented the use mobile money transfer services known as MPESA in which transactions are solely undertaken through that country’s currency”
Somaliland has two e-banking services namely e-Dahab operated by Somtel a subsidiary of Dahabshiil Group and Zaad service provided by Telesom company.
The almost 100% transaction in dollars utilized by the two e-bs King services have led many to scapegoat them for rising inflation in the country.
“In reality Kenya’s mobile money services are calibrated in Kenya shillings and do not exchange in foreign currency, interestingly also is that the amount a mobile subscriber can deposit in his cell phone is regulated by the Central Bank of Kenya these measures help keep inflation at check.” Said Mr Duale .
“When inflation is high the consumers bear the brunt because they have to cough much to buy goods and services this literally means things become expensive and the value of the money depreciate. Worse still the ordinary man in the street suffers as inflation hurts the poor mostly. In this respect I am requesting the government and the who is who in the business community and consumers to stop engaging in blame games and quickly convene to find a lasting solution to this menacing trend of inflation.”
On whether the elimination of rampant use of foreign currencies in Somaliland and Somalia more so through mobile money transfers and other transactions, and subsequent institutionalizations of related local currencies as only legal tender would rein forex rates and subsequently stabilize the economy, Mr. Duale said “It is a must we use our legal tender which is Somaliland/Somalia Shillings because many people receive their salary or transact in Somaliland Shillings so the unchecked or over use of the dollar automatically devalues the shilling thus inflation occurs and as a result the economy suffers. Like Kenya which uses the Shilling it’s imperative we follow suit. Once upon a time the Shilling was trading Sh.3000 to a dollar today it is 7000 Shillings.”
Asked about an on going public debate pertaining to suspect legal loopholes existing in the Somaliland/Somalia mobile money services in terms of identity and background checks of customers sending or receiving money and if it was time to implement stringent, he concurred by saying
“Somaliland parliament has passed a motion on money laundering and all mobile telephone money transfers companies have implemented this legal necessity so it is for the interest of Somalia and Somaliland telecommunication companies, ,banks and remittance agencies to follow the guideline given to them by the Central Banks of their respective countries after provision of licenses.”
Elaborating on the legal framework which obliges Banks and mobile money companies to reveal the identity of their customer if need of investigation or covert operation arises the e-dahab operator said
“Yes there is an act of parliament which state that all banks and money agencies work closely with the Central Bank this is not a new phenomena as its under international obligation to counter money laundering and other dirty money channels tainting the country image or causing inflation . So it is important for all stakeholders in the money business to pay attention and follow the law.”
He welcomed the government move to curb the endemic inflation and promised to work in that direction.