July 2, 2011 ·11 Comments
Abdirashid Duale, CEO of Dahabshiil, one of Africa’s largest money transfer companies, gave the keynote address at a conference hosted by Oxford University from 29-30 June. The two day event, the first of its kind to focus on important issues facing the Somali diaspora community, explored in particular how developments in media and communications shape the way the diaspora engages with and influences the population at home politically, economically and culturally. Other speakers at the event included academics from both within and outside Oxford University, along with journalists from the BBC, Al Jazeera, VOA and other media institutions including several prominent Somali outlets.
Dahabshiil has a 40-year history of serving communities around the world. Its current core business is in the transfer of remittances to East Africa, a vital flow of income to many in the region. Its expanding network of agent and payout locations stretches to some of area’s most remote locations, extending an essential lifeline to the inhabitants and helping to sustain isolated local economies.
In his keynote address, Mr Duale discussed the rapidly developing regional telecoms industry, and in particular how Dahabshiil’s money transfer operations are becoming increasingly interlinked with the company’s growing involvement in the latest wireless technology, working closely with strategic partners. He went on to discuss Dahabshiil’s recent acquisition of a majority stake in SomTel, a fast-growing, leading Somali telecoms and mobile internet firm with expertise in advanced wireless technology and high speed broadband. The Somali region’s telecoms industry, as Mr Duale explained, is one of the most competitive in the world, having undergone rapid expansion since the early 1990s. He remembers a time when there were no private telecoms companies in Somalia, just a state-owned network. Back then, high frequency radio was still the preferred method of communication – cheap, simple, and mobile. In some of the more remote regions, Dahabshiil even used HF radio for its operations; as he put it, ‘HF was, for us, the mobile of the time’. There are currently up to thirty private telecoms companies providing voice and data services across the Somali-speaking regions. Demand is strong and price increases are limited by stiff competition. Consumers also stand to benefit from the fast-approaching interconnection of telecoms operators, as well as the imminent installation of a fibre-optic marine cable that will enable high speed internet.
Telecoms services are becoming ever more widely available and the costs of international calls are among the lowest in the world. Mr Duale believes that with such affordable mobile networks in place and a growing number of companies – including SomTel – offering the latest GMS technology, the infrastructure is in place for a rapid expansion of Dahabshiil’s mobile banking and ‘eCash’ debit card services across the region and beyond. The benefits of such a development in the money transfer industry will be far-reaching. The efficiency of these new services is something with which Dahabshiil’s customers are already familiar; remittance transfers in and out of Africa take minutes to clear regardless of where in the world money is sent or received. Customers have access to a web-based transaction tracking facility, and an SMS notification is sent to the recipient as soon as the funds are available.
Closing his speech, Mr Duale returned to the issue of migrant communities. “Dahabshiil”, he said, “is a migrant-run business that understands the needs of diaspora communities, and helps to strengthen their links wherever they are in the world.”
In an interview for the Financial Times published last month, Mr Duale spoke about the importance of that understanding to the success of his business: “Without knowing your people as your customers and your staff, and them trusting you, you cannot be in business. I knew Somalis, I knew how to serve them, so it was not some sophisticated customer I had to find,” he said.
The UN estimates total annual remittance flows into Africa to be around $22 billion, having risen from $9 billion in 1990. Remittance flows within the continent, particularly to rural areas, have also increased as a result of rising mobility. Many East African countries rely on remittances to sustain economic development, and the integration of mobile telecoms with money transfer services will eliminate many of the regional challenges currently faced by the latter and greatly improve access to finance in some of Africa’s poorest communities.Follow @somalilandpress