The Moral Economy of Remittances Blog

It goes without saying, although in times like these it ought to be said, that remittances to Somalia and the Somali territories are vital to individual and communal sustenance. Remittances foster easily discernible links between the diaspora and the motherland and are easily quantifiable – although cold calculations of remittance contributions to the GDP fail to capture the scope of their relevance on the ground.

During the summer of 2013, while in London completing graduate studies, I heard rumblings about Barclays Bank trying to sever ties with Dahabshiil, a Somali money transfer company, because of money laundering and terrorist financing fears. Such insinuations, in a post 9/11 climate of terrorist fearmongering and sweeping Islamophobia, were unfortunate but not surprising. Barclays isn’t alone in re-thinking its relationship with Dahabshiil, as other British banks including HSBC and the Royal Bank of Scotland have cut ties with the company. Remittance flows to Somalia account for 50% of the economy, hence any mitigation or outright blockade of money transfers can prove more disastrous than mere nuisance for family members and friends back home, in both the short and long term.

There are plenty of stories which highlight the vital role remittances play for Somalis in Somalia and in the Somali territories. For Amin Yusuf, a journalist based in Mogadishu, his pregnant wife’s hospital bills are source of unyielding anxiety. American banks are threatening to bar his older brother’s money transfers to him and his growing family. Hali Osman depends on the funds sent by her sons in the United States and Qatar for basic needs fulfilment for both herself and her 100-year old mother. Thousands of children depend on remittances for their school fees and other basic needs. With the threat that large Western banks pose to the operative capacities of Somali money transfer companies, many Somalis are trying their level best to fill the gaping hole left by stalled remittances. For Maryan Hussein, a mother of seven children, starting up a small business, selling daily living items like oil and sugar, empowered her to continue financing her son’s education. She is Somali resilience personified! I can’t do justice to the weight of these accounts in this piece alone. Large financial institutions ought to do some heavy lifting, and familiarize themselves with these and other personal accounts so that the remittance accounts they so virulently want to erase are humanized.

As a form of everyday knee-jerk resistance, I would cut my eyes angrily at any Barclays Bank branch I came across while on walks and during school commutes. It got me thinking about the moral economy of remittances. No doubt affective ties between kin and friends are buttressed by diasporic money transfers to Somalia and the Somali territories. Giving with purpose is the lofty value added that is incalculable by economists and invisible in austere GDP totals. Remittances are simply worth more to both sender and recipient than the physical bank notes sent and received. Of course the act of giving isn’t just the purview of diaspora – those in the motherland remit a host of goods to those carving out lives and those firmly rooted abroad. Indeed, it is the sentimental character of reciprocal giving that Barclays, and other mammoth financial institutions, fails to understand. Financial remittances telescope borders and enliven personal relationships. Barclays and other banks could learn a thing or two about the dignity such transfers inculcate between and among participants. In our post-modern age, positivism renders most institutional practices soulless and machine-like. I know that Somali money transfer companies are not exempt from poor institutional practices but, it really ought to be said that, remittances are vital to individual and communal sustenance in Somalia and the Somali territories. Sustenance of the body and sustenance of the soul.

Edil K completed an MSc in Comparative Politics at the London School of Economics. She is interested in war and military studies and forging lasting peace in turbulent times.


  1. The “moral economy of remittances” is a moving piece that provides useful insights on how Somalia”s burgeoning privately owned remittances agencies contribute not only to the local economy but also the veritable lifeline to hundreds of thousands of people with diverse needs which in turn continue to buttress the reciprocal relationship between the diaspora and their relatives back home. Even international NGOs who operate in Somalia came out in their numbers with solidarity and have expressed their dismay on the decision by Western financial institutions to stop serving to remittances agencies. Make no mistake though, this decision wasn’t made lightly and of course it doesn’t single out the Somali remittances only but equally impacts on a whole host of likeminded countries in which perhaps Somalia makes on top of the list. Aside from fairness or not, Barclays and other financial institutions have arguably legitimate reasons and concerns to discontinue this service, in part, the newly introduced US financial governance legislation would have detrimental bearing on their ongoing business interests should they ignore the fact dealing with these remittances agencies operating in conflict stricken areas. The hefty $9 billion fine of money laundering presented to the French Bank Socialite by simply facilitating money bound to Tehran, which was under UN and U.S. Sanctions is just one case in point. Hence, can we also closely look at how these remittances agencies continue to cripple and impede Somalia from reestablishing its Central Bank effectively largely because of coveting to maintain their dominance. Reopening and equipping Somalia’s Central Bank with all the necessary legitimate instruments is the key to reconstitute international trade and the free movement of capital.

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