International Bank of Somalia became the first lender in the Horn of Africa nation to handle foreign transactions, the latest sign that the country is stabilizing after decades of conflict, Chairman Hassan Ahmed Yusuf said.

The bank, run from a two-story building in the capital, Mogadishu, obtained a so-called Swift code that enables lenders to carry out international money transfers, Yusuf said at a ceremony to mark the official start of operations on Oct. 11. IBS is taking advantage of increased stability in the city after the success of African Union-backed Somali government forces against al-Qaeda-linked Al-Shabaab militants, he said.

“The relative calm and tranquility in the country, especially the capital city, made us take a decisive step,” Yusuf said. “We see great business opportunities are emerging.”

Al-Shabaab has been in retreat in Somalia since its fighters were forced to withdraw from Mogadishu in August 2011 after a series of military defeats. African Union forces and the Somali national army have forced the insurgents to relinquish control of about 70 percent of southern and central Somalia, according to the presidency. On Sept. 1, a U.S. missile strike killed the militant group’s leader, Ahmed Abdi Godane.

The country still faces challenges preventing attacks. Yesterday, at least eight people were killed and another 15 were injured when a car laden with explosives blew up near a popular cafe in Mogadishu. No one has claimed responsibility for the blast.

‘Dangerous City’

Somalia has been mired in civil war since 1991, when the dictator Mohamed Said Barre was removed from power. The government is using its recent military advances to try to attract investors to help rebuild its economy. Last week, Salaama Somali Bank became the first lender to introduce ATM machines in the city.

“I feel proud of my government bringing stability to the capital, Mogadishu, and to see the good news happening before my eyes today like the launching of an international bank in Mogadishu, which was once dubbed the world’s most dangerous city,” President Hassan Sheikh Mohamoud said at the ceremony.

Somali State Minister of Defense Mohamed Ali Haga said in an interview on Oct. 11 that the government expects to liberate remaining areas controlled by al-Shabaab by May.

Source: Bloomberg

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