Hiiraan Online

By Kiernan Green

People in Somalia have long relied on money from family members abroad to build hope for the future. These contributions — also known as remittances — have been essential during the last three decades of civil conflict in the east African country. 

Just ask Hassan Mowlid Yasin. Relatives who emigrated to the U.S. regularly sent remittances to his grandmother. Those paid for Yasin's education in public health at Jobkey University in Somalia's capital, Mogadishu. 

"The Somalia diaspora has been very supportive for the past 30 years … feeding many millions of households," said Yasin, 31. Remittances account for a quarter to 40 per cent of Somalia's GDP, according to a 2019 report from the Munk School of Global Affairs at the University of Toronto.

Today, Yasin is executive director of Somalia's Greenpeace Association. He's on the front line promoting education and environmental policy in a country that is feeling climate change acutely.

Somalia's ongoing drought has widened pre-existing gaps in the country's economy. Four partial rainy seasons throughout the past two years — generally thought to be a direct result of climate change — have brought the most persistent drought in four decades to the Horn of Africa. 

And Somalis as far away as Canada are helping foot the bill.

Hibaq Warsame, a project co-ordinator at Toronto's Midaynta Community Services for Somali Canadians, said she can hear the burden of the ongoing drought in the voices of relatives on the phone.

"Especially with elderly members of my family," she said.

Since the drought began two years ago, Yasin said an estimated 600,000 of Somalia's livestock have perished. Not only do livestock like goats and cattle provide Somalis with diet staples of meat and milk, but up until recently they accounted for half of Somalia's export earnings and another 40 per cent of its GDP. 

Due to this, the number of Somalis facing an "unprecedented level of need" for food doubled last October to nearly eight million, according to a December report from the UN. 

"A lot of [Somali Canadians] are being contacted by family back home, saying, 'We're not able to afford food,'" said Warsame. "It's not even on a month-to-month basis. It's a day-to-day basis." 

What used to be $150 US a month for Warsame's family has increased to $350. Four others working at Midaynta said they've made an identical increase in their monthly remittance spending to Somali relatives. 

Jibril Ibrahim, president of the Somali Canadian Cultural Society of Edmonton, said his remittance spending rose from $100 to between $300 and $500 a month. That's separate from what his wife sends her own family, he said. 

Ibrahim said the budgeting difficulties for Somali Canadians are compounded by Canada's own inflation pressures and the COVID-19 pandemic's effect on job security for recent immigrants. 

"But still they have to send money. Because unless they do so, more and more people would be lost to the drought." 

Living in Mogadishu, Yasin said he hasn't had to flee the famine, which has been mostly contained in the country's rural areas. But many farmers and their families, as well as those they fed in refugee camps, have made a mass movement to Somalia's cities. 

This, in turn, has led to rising costs in the country's capital, including record food inflation (17.5 per cent) and rental rates, said Yasin, who has a three-year-old daughter.

"Things are very expensive now in Somalia," he said.

The Somalia Greenpeace Association, one of the few organizations advocating for climate resilience policies in Somalia (and not affiliated with Greenpeace International), attended the COP27 climate summit in Egypt last November. 

The summit's hallmark was "loss and damage" funding from richer countries for developing ones, like Somalia, which bear the brunt of the climate crisis. To date, Canada has committed $5.3 billion to climate financing worldwide.

The millions of dollars the United Nations currently sends to Somalia are designated for emergencies only, such as internationally displaced people or food assistance, said Yasin. Little is left over to fund long-term infrastructure.

To have any long-term impact, Yasin said loss and damage funds must be earmarked for technology like new irrigation systems, solar-powered wells, modern tractors and other agricultural equipment. 

"If we prevent [internally displaced people], if we build resilience, we will be able to carry the whole community. That's the biggest thing we need to focus on on the ground, other than emergency responses," said Yasin.

Ibrahim is skeptical, however, that institutional funding can offer more to Somalia's drought resilience than diaspora remittances, given the latter's outsized role in the country's economy. 

For Somali Canadian remittances to go even further, Ibrahim said legal methods for money transfers in Canada should be made cheaper and more accessible.

 

 

Today, money-transfer businesses registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are the only method for legally sending funds abroad.

Some MSB transfers can be made through a phone call, but they typically require an in-person visit — the timing of which is especially critical if the overseas recipient is facing an emergency, said Yasmine Aul, an outreach worker at Midaynta. 

Most MSBs with routes from Canada to Somalia operate out of the United Arab Emirates, are fixed to investments in gold or jewellery and involve substantial additional fees, said Ibrahim.

An effective method to save time and cost is hawala, he said. A sender provides remittances, their recipient's name and location to a local hawala broker, who contacts a hawala broker at the recipient's location to provide the recipient with the amount given to the first broker.

Hawala has been used throughout South Asia and North Africa since the eighth century, and unlike typical systems based on promissory notes or other debt instruments, is based solely on an honour system between brokers. The system relied on written correspondence in the Middle Ages, but today can be taken care of over the phone in a matter of minutes, said Ibrahim.

However, since it doesn't require the physical movement of money or a paper trail, hawala has faced regular controversy as a vehicle to fund extremist groups, like al-Shabaab in Somalia, and illegal markets. 

During the pandemic, several MSBs and bank accounts based in Edmonton used for sending remittances to Somalia were closed because of their affiliations with hawala vendors, despite having undergone and passed audits by FINTRAC, Ibrahim said.

When Edmonton-area MP Randy Boissonault, the assistant finance minister, was asked for comment, a press secretary said financial institutions have "the discretion to close accounts or refuse to do business with MSBs." He also said the Proceeds of Crime (Money Laundering) and Terrorist Financing Act requires client identities and certain transaction records, which are not required for the hawala system.

Ibrahim says he understands the government's position, but questions the blanket illegality of hawala in Canada. 

"We're not sending $10,000 or $20,000 [individually]. We're talking about $100 from individuals to their loved ones," he said. "How is that going to help terrorist groups?"

Ibrahim said registered MSBs still deliver remittances to the right place. But thanks to their substantial fees and Canada's own cost of living increases, "there's an additional cost that we [Somali Canadians] have to sustain as a result of government policy."

The Somali Canadian Cultural Society of Edmonton collected $150,000 across Edmonton's Somali community last year, said Ibrahim. Their focus was primarily the Jubaland region of southern Somalia, where the rebel group al-Shabaab took control of charcoal production. 

Left unregulated, the tree-cutting required to produce charcoal has led to rapid deforestation, worsening Somalia's drought conditions. As a result, 80 per cent of Jubaland's livestock perished in 2021, according to the UN Office for the Coordination of Humanitarian Affairs. 

Midaynta raised $7,000 through two events since September. This year, one of the organization's goals is to bring the issue to local politicians and Toronto's immigrant community at large.

"We're constantly in contact with our family and friends back home. We're getting first-hand information," said Warsame. But she said awareness of the severity of Somalia's drought, its impact on so many facets of life and the resulting onus on the diaspora community "isn't as widespread in Canada as we'd like it to be."