Electronic Banking Service Providers Undermine State Efforts to Curb Inflation

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Hargeisa (THT) – Citizens continue to suffer high costs of living despite Government efforts to curb inflation and reduce the upward spiraling dollar Somaliland shilling rate of exchange This anomaly is as a result of professionally disguised activities embarked upon by the two giant telecommunication companies of Telesom and Somtel providers of Zaad and e-dahab mobile banking services in Somaliland.

Having publicly agreed to support Somaliland government activities geared towards alleviating livelihood difficulties exacerbated by high levels of inflation and high rates of foreign currency exchange fronted by the ministry of finance, the telecom giants have established tomfoolery antics to circumvent the deal. While Zaad and e-dahab services have included use of local currency in financial transactions as per accord with the government it is an exercise in futility as the Somaliland shilling can only be transacted in the morning section and only when users are allowed to transmit the amounts of 200,000 and 150,000 Somaliland shillings for Zaad and e-dahab respectively. Seemingly an novel idea as it complements the formerly dollar only use, the ceiling of local currency placed by the firms is a calculated move to defeat initial purpose since most citizens make regular transactions of between $1 to $10 thus making execution of local currency untenable. Disturbing is the tendency that ensues with the two operators whereby from lunch time-to following morning GMT +3 conduct of mobile banking transactions is only in dollars since those manning the service for both firms are never in office thus a professionally disguised antic to defeat government strategies and continue annihilating livelihoods. Now while the above examples clearly indicate moves contrary to agreements with the state made without coercion whatsoever, the much acclaimed order by the central bank that 30% of all remittances and funds from abroad should be paid in local currencies by money service business of which the two
telecoms are also major players is a non-starter. The Telecoms and Money Service businesses companies pursuant to their intent to continue amassing massive profits in disregard to resultant livelihood problems entailed nationwide have come up with a professional means of circumventing the order through utilization of their “Roaming service” The perfected 30% local currency payment order circumvention sees Telecoms and Money Service businesses operators topping up the edahab and Zaad accounts of their worldwide operators with 100s of 1000 dollars. Seemingly a normal and sound business operational move, the use of Roaming Service end motive is actually geared towards skirting the 30% local currency payment order for the operators upon receiving deposits from clients in the diaspora, then sent directly to recipients in Somaliland. If a recipient gets paid through the mobile banking service this surely means that the funds were not transacted through the money service business-Hawala thus the 30% local currency payment rule bypassed. One might query how the man examples give here are calculated to undermine government efforts towards curbing inflation and high rate of currency exchange but the simple fact is having eliminated almost 90% of foreign currencies entering the country is a sure bet that the rate of exchange will continue to spiral upwards thus inflating the cost of living. Secondly this move also places the government in a precarious situation in relation to its obligated abroad based executions in lieu of non-existent foreign currencies that are hoarded by unscrupulous business tycoons perpetrated for the selfseeking motive of accruing profits courtesy of interests from their accounts with international banking institutions which is not only anti-Islam but life threatening to citizens of Somaliland.

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