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Saturday, June 28, 2008

Money Transfers in Somalia - One version of its Corrupt History

This intersting piece is from Aden Yabarow a writer for the Somaliland Times. Much of what is claimed here is unverifiable, though the general time line is consistent with other published work.

It claims to refute this article bublished on 14 May By Reuters Africa.

In reality, it also claims it also confirms the UNDP is corrupt. It also insight into the remmitance industry in Somalia, which is used by legitimate expora as well as terrorists to move money around.


In this article I will be highlighting the major events, which happened in the Somali Remittance Industry.

And I am proving that Mr Ismail Ahmed’s so-called whistle blowing interview to the Reuters in which he accused Dalsan as a terrorism protégé was just ‘crocodile tears’. Readers will also get a brief awareness about UNDP [United Nations Development Program]Somalia’s corrupt deeds and how it mismanages Somalia’s funds.

Part I

I believe that desperation has created Mr Ismail’s attitude. During his employment with UNDP-Somalia, SOMTA [The Somali Money Transmitters Association] was established, and Mr Jirdeh was appointed as its chairman.

  • With the full involvement of Mr Eric Overvest funds were approved for SOMTA, anti-money laundering training programs were given for SOMTA’s members ONLY and a new agreement was signed with an American company to develop an IT Platform for the Remittance Companies (including SFSA member but without their knowledge).

  • More than USD 600,000 is allocated for PAYQUICK to design and execute the Platform. Over USD 170,000 were allocated for SOMTA’s operations in Dubai.
  • And since some Pretoria Salute (as South Africans call bribing) deals were involved a disagreement happened between the interest group.
  • Mr Eric Overvest of UNDP-Somalia sided with Mr Jirdeh, as he is the Chairman of SOMTA and controls the funds.
  • The infighting ended up in the sacking of Mr Ismail from his job with UNDP Somalia.
  • To take his revenge from the UNDP, Mr Ismail gave an interview to the Reuters. In that interview he singled out a non- existing company called Dalsan.
  • I believe that the main reason for choosing Dalsan is that the former chairman of SFSA Europe Mr Osman and SFSA members was against his employment with the UNDP-Somalia.
  • SFSA claimed at the time that Mr Ismail was an employee of Dahabshiil as mentioned by Mr Ulusow’s article.
  • And to kill two birds with one stone he accused UNDP-Somalia through Dalsan’s alleged connections with a terror group as he claimed.

To update the readers about the chain of events, here are the major milestones, which happened in the Industry since 2001.

Part II

2001 was the year that Albarakat Money Transfer Company was closed. This action triggered the need for an organisation, which regulates and protects the Somali remittance industry.·

  • In 2003 Somali Financial Services Association was launched in Dubai and London. The inception of SFSA was attended by representatives from the remittance companies and financial regulators from UK, Continental Europe and the US.
  • A quote from former UNDP Resident Country Director Mr Maxwell Gaylard is “The Association will help safeguard this lifeline into Somalia and contribute to the development of the economy and the capacity of those who drive it.”
  • Late 2005, UNDP Somalia employed Mr Ismail Ahmed. Most of the SFSA members were opposed to his employment. Dalsan’s UK representative and then chairman of SFSA was very vocal about this employment.
  • UNDP-Somalia insisted on its employment of Mr ismail and gave an opportunity to an interest group, which got the dossiers of all the remittance companies under its control.
  • Mr Mohamed Jirdeh Hussein – former secretary general of SFSA and father-in-law of Mr. Ismail Ahmed – supported UNDP-Somalia’s decision.
  • The relationship between SFSA and the interest group soured immediately.
  • A new association called SOMTA was established in London on 20/07/2006 as per[ [This website is apparently underconstruction @ CBJDigital
  • The new organisation represented only 4 remittance companies. UNDP-Somalia supported SOMTA and severed all ties with SFSA, which represents 7 money transfer companies.
  • SOMTA’s establishment divided the Somali Remittance Industry into two groups.

SFSA, which is the majority and self sustained

SOMTA, which is the minority supported and financed by the UNDP.

  • As Mr Ulusow predicted and supported by a research conducted by independent concerned Somali parties, SOMTA is used only as a tool of funds embezzlement, and so far it hasn’t succeeded in protecting or regulating the Somali Remittance industry.
  • Another new development is the introduction of PAYQUICK. This US Company was assigned to design a Platform for the industry. Interestingly, the initial cost of the project is USD 640k and could run to about a million in few years.
  • In order to make things worse for the industry, Somali Remittance Companies’ compliance is linked to the acceptance and usage of PAYQUICK’s Platform. In other words, UNDP-Somalia is not recognising any money transfer company as a compliant organisation unless it utilises PAYQUICK’s platform.
  • PAYQUICK’s deal closes the door for the Somali IT experts, which are available in the market. Industry sources told me that Somali IT professionals are technically more advanced than PAYQUICK and can develop a better platform at a fraction of PAYQUICK’s costs. They are easily accessible and culturally compliant than a less know Foreign Service provider.
  • Nearly three years passed. UNDP-Somalia’s divide and rule policies spearheaded by Mr Eric Overvest failed.
  • PAYQUICK’s platform project couldn’t be implemented and the few remaining members of the group disintegrated. · After successive failures, UNDP-Somalia contacted SFSA and invited it to a meeting held in Dubai in February 2008. Some insiders believe that the main reason of SFSA’s invitation was to cover-up the wrong doings of the interest group. And to fulfil the agreement with PAYQUICK, but this time with the endorsement of the whole industry.
  • It was also a message intended to daunt some rouge members of the interest group. · 60% of the contracted funds were to be released for PAYQUICK in February 2008, but SFSA rejected to be a rubber stamp for this adventure at this final stage.
  • It is now Mr Jirdeh alone who is going to approve the release of the funds on behalf of SOMTA members only. Nonetheless, the execution of PAYQUICK’s Platform is far away as some SOMTA members showed reservations about its viability.·
  • Successive meetings in February and March 2008 with UNDP-Somalia, SFSA members proved to the UNDP that its members comply with the rules and regulations of the host countries.
  • Some SFSA members are registered and operate in countries where none of SOMTA members are registered. It was clearly stated to the UNDP’s Eric Overvest that it is unfair to stereotype SFSA to what others may say about it especially issues regarding compliance.
  • As usual UNDP-Somalia made promises to SFSA with regard to International Compliance Training globally and other supports similar to what it offers to SOMTA. According to insiders nothing has been done for SFSA and UNDP-Somalia once again broke its promises.
  • A separate meeting between Eric Overvest of UNDP-Somalia and SOMTA members happened in Dubai during March 2008.
  • SOMTA were willing to impeach their chairman and executive director, Mr M Jirdeh. The chairman was accused of having a corrupt relationship with UNDP and PAYQUICK and that is why he is advocating for the implementation of PAYQUICK’s Platform. He was also accused of misappropriating SOMTA’s funds and using them for his personal purposes.
  • Unfortunately, Mr Eric Overvest was directly opposed to the removing of Mr Jirdeh and the basic rights of SOMTA’s members were denied. This direct interference of the industry affairs shows another page of UNDP-Somalia’s blunders.·
  • An article based on Mr Ismail’s account was published on 14/05/2008 by the Reuters. Though the article highlighted UNDP-Somalia’s grey dealings it came from a former member of the interest group. The gentleman was taking revenge from the UNDP and from a former chairman of SFSA who was opposed to his employment with the UN.
  • Insofar compliance is concerned; this article is not based on the factuality on the ground. As all distinguished readers know, it is not possible for any money transfer company to operate in a western country without fully complying with its financial rules and regulations.
  • Whether it is a SOMTA member or SFSA member, all remittance companies operate in a transparent and compliant way in Europe and in the US. This fact contradicts with Reuter’s client’s claims, which are no more than tears shed by a crocodile after feasting with his prey.
  • Reuter’s article has exploded a shell within UNDP-Somalia and an independent commission was appointed to investigate the matter. It is not the first time that investigations were made into the corrupt affairs of UNDP-Somalia’s management of this project.
  • So far none of the enquiries were successful because the perpetuators were the suspects and the judges both.· The new independent commission did their assessment for two weeks and met with the same UNDP-Somalia managers who were accused in Nairobi.
  • Then they were given the names of their counterparts in Dubai. They visited Dubai in the early June 2008 and secretly met with the pre-assigned individuals. They didn’t meet anybody outside the sphere of the corrupt group.
  • I don’t expect that the outcome of this investigation to be different from its predecessors. The results will be dictated by the remnants of the interest group who are still in the UNDP offices in Nairobi.
  • Part III

The above paragraphs shed light on the history of the UNDP-Somalia and the Somali remittance industry. It also highlights the level of corruption that is happening and the integrity of UNDP-Somalia’s officials who are handling this project. It also stresses the lies and threats, which the remittance companies endure from rouge elements within UNDP-Somalia.

  • In some instances some members of the industry was indirectly threatened by using UN reports regarding arms embargo to Somalia.
  • Some members are in constant fear of closures. It is imperative to note that, if a small fraction of the Somalia’s aid is managed this way; how many corruptive dealings could happen in the tens of millions of US dollars poured into UNDP-Somalia’s account.
  • Though the UN had past history of corruption within its ranks, UNDP-Somalia’s case is very exceptional.Somalia has no functioning Central Bank and every penny of international aid comes through UNDP-Somalia.

It is a tragedy to have non-functioning government institutions and a corrupt organisation like UNDP-Somalia which serves as the cashier and the accountant general for poor Somalia. I urge the UN, the international community and the Somali intellectuals to give proper attention to the misappropriation of the aid money given to Somalia and funnelled through UNDP-Somalia. I recommend the UN Secretary General to appoint effective diplomats like Mr

Ahmed W Abdoulah to run the financial affairs of Somalia. I also urge the TFG to appoint effective and efficient counterparts to the UNDP-Somalia in order to safe guard the scarce resources they get from the international community.

Aden Yabarow E-

See the rest @ Somaliland Times

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