IGAD lauds Kenya for lifting ban on Somali cash transfers
24 June 2015, 18:37
Nairobi - IGAD has commended the Kenyan government for lifting a ban on Somali remittance firms that was imposed in April, and urged Western countries to follow suit.
The Inter-Governmental Authority on Development
(IGAD) Executive Secretary Mahboub Maalim said the unlocking of the ban
will help to avert poverty and build resilient communities in the Horn
of Africa nation.
"This is a bold move by the president who has in mind the interest of
not only Kenyans but the wider region at large," Maalim said in a
statement released in Nairobi.
Kenya's central bank (CBK) lifted the suspension on 13 Somali
remittance companies on Monday, enabling the firms to resume their
The Horn of Africa nation has no formal banking system, and money
transfer operators provide the services people in foreign countries
would expect from a bank.
About 40 percent of Somali families depend on remittances to meet
their most basic needs, including food, health care and education, and
80 percent of the capital for start-up businesses comes from the
Maalim stated that the Kenyan government had been very consistent in
its protection of flow of remittances to those who need it most,
including refugee population on its soil.
The Executive Secretary also appealed to Western governments and
banks to continue providing services to Money Transfer Operators (MTOs)
with a view to helping the region alleviate poverty, and by extension,
In February, principal banks facilitating money transfers to Somalia
from the U.S., Britain and Australia broke ties with the Somali
remittance companies over terrorism fears.
The East Africa's bloc also said it plans to host a regional meeting
on the sidelines of the Third International Conference on Financing for
Development that will take place in Ethiopian July.
Maalim said the meeting will bring together finance ministers from
Member States to review linkages between remittances and household food
security in the region, with a view to formulating appropriate policies
that enhance remittances contribution to local, national and regional
Experts of this roundtable discussion will also assess the impact
that banking legislations in the U.S., Britain, and Australia have had
on Money Transfer Operators or remittance companies.
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