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Angry people loot stores and hawala shops in Abudwak town

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Hundreds of angry residents in Abudwak town have looted hawala shops and stores in the Galgadud region in central Somalia forcing business activities in the town closed down.

The angry residents turned violent as they were protesting against the business owners’ move to ban the 1000 Somali banknotes following rumours of fake banknotes in circulation.

The menace started in Hiiraan last week where the Al-Shabab group issued restrictions on trading with the only 1000 banknote remaining from the Somali shilling and soon spread to other regions including Galgadud.

“Residents started to protest the against the foreign exchange and business owners who rejected to trade with the Shilling. The protest turned violent. Several shops of hawalas and food stores were looted.” Said Abdi Yonis, a resident in Abudwak.

The protesters mostly low income families in the town later marched in the centre of the town as they called the Federal Government and local authorities to intervene the menace that led to the people’s lives to face standstill.

They warned the local traders against the use of EVC Plus, a local mobile money transfer service.

On Sunday residents in Beledweyn took to the streets to protest against the ban on the Somali shilling and alleged the business owners and foreign exchange operators to have sided with Al-Shabab.

A directive from the Ministry of Finance of the Hirshabelle state in Somalia on Tuesday barred all services of the local mobile money transfer by the Hormuud Telecom following standstill in the central Somalia region of Hiiraan.

The directive came following the closure of businesses in Beledweyn for the third day.

“After witnessing the challenges faced by he community in Beledweyn which led to business closure, we have ordered all EVC Plus (Electronic Voucher Cards) stopped. Said the directive from the Jowhar-based Ministry of Finance of the Hirshabelle state.

EVC Plus is operated by the Hormuud Telecom.

Local traders rejected to trade with the Somali 1000 banknote, the only banknote currently in circulation in the country. The move came after Al-Shabab issued ban against the banknote as they alleged that fake new denomination of 1000 banknotes were coming from Puntland.

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VIDEO: Inside Somali Fishing

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Fishing is a vibrant sector along the Somali Coast. With continued support through investment and improved management, the Somali fishing sector has the potential to boost the Somali economy, ensuring long-term growth and stability in the region.

Learn more at oneearthfuture.org

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A lifeline for millions in Somalia, money remittance industry seeks more support

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LONDON — Every month, Fatma Ahmed sends $200 of the earnings she makes in London to her family in Somalia.

“It’s for daily life. For rent, for buying grocery things, to live over there. Because actually in Somalia, that much we do not have,” she said.

Remittances from overseas diaspora constitute a vital part of the economy of many developing nations, none more so than Somalia, where the inflows add up to more than foreign aid and investment combined. However, analysts warn that the industry is poorly understood by regulators and banks, putting the welfare of millions of people at risk.

The two million Somalis living overseas send an estimated $1.3 billion back home every year. With no formal banking system in Somalia, most of the diaspora use remittance services.

Technology makes that possible, says Abdirashid Duale, CEO of Dahabshiil, one of Africa’s biggest remittance services.

“Now, it is so instant, where we have the latest technology, with the internet, secure channels that we can use to send money back home,” Duale said. “Or we use mobiles … smartphones, technology where it will help us to deliver money quickly, but less costly. Technology is supporting us also with the compliance issue.”

Remittance companies rely on global banks to route the money, and those banks must comply with regulations on money laundering and the financing of crime and terrorism.

Citing those concerns, many banks have chosen to withdraw from the market. Such a move is unnecessary, says remittance industry expert Laura Hammond of London’s School of Oriental and African Studies.

“Very often, it is not based on any kind of empirical evidence that shows that money is going into the wrong hands,” Hammond said. “The fear is just there is a conflict in Somalia, there’s the al-Shabab movement. And so there is a problem in a sense, a real precarious nature of the Somali remittance industry.”

The industry received a high-profile boost last month as the Bill & Melinda Gates Foundation donated $1 million using the remittance firm Dahabshiil, along with mobile phone companies Somtel and eDahab, with the money transferred “live” to 1,000 families suffering the drought in Somalia.

The technology is moving fast. However, the cooperation of the global banking system remains key, and the remittance industry wants regulators to do more to support this lifeline.

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Ethiopia devalues currency by 15 percent to boost exports

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ADDIS ABABA, Oct 10 (Reuters) – Ethiopia’s central bank devalued the Ethiopian birr by 15 percent on Tuesday, its first such move in seven years to boost lagging exports.

The birr was quoted by the National Bank of Ethiopia at a weighted average of 23.4177 against the dollar on Monday, compared to what will be 26.9215.

“The devaluation was made to prop up exports, which have stagnated the last five years owing to the birr’s strong value against major currencies,” Yohannes Ayalew, the bank’s vice governor, told a news conference in the capital Addis Ababa.
The International Monetary Fund (IMF) and the World Bank, have both repeatedly urged Ethiopia to consider devaluing its currency to boost exports as they are mostly unprocessed products and need to stay competitive on price.

Ethiopia has operated a managed floating exchange rate regime since 1992.

The Horn of Africa country is the continent’s biggest coffee exporter but its total export revenue has been falling short of targets for the last few years owing to weaker commodity prices.

Addis Ababa earned $2.9 billion in the 2017-2018 fiscal year, versus a target of $4 billion.

On Tuesday, the central bank also announced that it has raised the main interest rate to 7 percent from 5 percent to stimulate savings as well as to counter inflation.

“The rate was pushed to mitigate the inflationary pressure that could arise from the devaluation,” Yohannes said.

Ethiopia’s inflation rose slightly to 10.8 percent year-on-year in September from 10.4 percent a month earlier, according to figures released by the statistics office on Friday.

Ethiopia’s economy is one of the fastest growing in Africa, with the IMF expecting a growth rate of 9 percent for the 2016/17 fiscal year.

The expansion, however, has mainly been fuelled by huge public expenditure. The government has invested heavily in dams for hydroelectric power, new highways and an electrified railway linking the landlocked nation to a port in neighbouring Djibouti.

The IMF has said Ethiopia needs to attract more private sector investment to maintain growth. But Addis Ababa has in the past tended to brush off such advice and said it would keep charge of key sectors. (Reporting by Aaron Maasho; Editing by John Stonestreet and Andrew Heavens)

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