Abdirashid Duale sees remittances as a key driver of development in sub-Saharan Africa.
Dahabshiil is keen to expand its Ethiopian presence following its remittance service partnership with M-Pesa Safaricom, CEO Abdirashid Duale tells The Africa Report.
The agreement at the end of June enables the Ethiopian diaspora to send money to M-Pesa mobile wallets back home. In May 2023, Safaricom obtained a license to become Ethiopia’s first non-state mobile service operator.
Remittance service providers have been targeting Ethiopia to take advantage of the country’s accelerating financial liberalization. Ethiopia’s first stock exchange since the 1970s, due to be launched by the end of this year, aims to attract diaspora investment in listed companies.
The central bank’s liberalization of the country’s foreign exchange regime, announced on July 29, includes a commitment to simplify the rules on foreign currency accounts held by the diaspora. Safaricom in March signed an agreement with Onafriq on remittances to the country.
We welcome #Ethiopian PM @AbiyAhmedAli's statement on key role of private sector & entrepreneurship, & a market-based forex rate. This will be good news for our customers including diaspora who want to remit money to Ethiopia & for its exporters & importers. pic.twitter.com/CdJ0qtqRwo
— Dahabshiil (@Dahabshil) July 28, 2024
Duale welcomed the Ethiopian government’s decision on July 29 to allow the birr’s value to be market-determined. *It is a positive development for the diaspora who want to remit money to Ethiopia, and for its importers and exporters,” he says. *We believe it will encourage the private sector and stimulate entrepreneurship.”
*We are always looking for new ventures in Ethiopia and more widely, as this helps drive development and generates employment,” Duale says. Dahabshiil was already working with M-Pesa in Kenya, and further cooperation with Safaricom is possible. “I believe it’s in both our interests and those of our customers to cooperate where there’s a mutual interest.”
Remittances, according to the World Bank, play a role in supporting the current accounts of African countries facing food insecurity, drought, supply-chain disruptions, floods, and debt-servicing difficulties. Flows to sub-Saharan Africa declined 0.3% to $54bn in 2023, according to the World Bank. The bank predicts growth of 1.5% per year in 2024 and 2025, constrained by slow growth in the US and a “feeble” rebound in flows from Europe.
Sprawling Conglomerate
Dahabshiil was founded in 1970 by Duale’s father, Mohamed Said Duale, in the Somaliland town of Burao. The company started by importing goods, including food, construction materials, and clothing from the Gulf, and developed a remittance service to help migrants send money back to East Africa.
Today, the Dahabshiil Group invests in sectors including petroleum, oil terminals, communications, fiber-optic cables, manufacturing, and electricity. It operates in 126 countries, including 40 in Africa.
Recent financial services additions include the DahabPlus app, through which it is possible to apply for an account with Dahabshiil Bank and a Mastercard. In the long term, Duale wants the company’s banking operations to be present everywhere in Africa, and able to serve all African diaspora markets. That would help trade and financial services across the continent to become more open and less bureaucratic, he says. Global companies should work with indigenous companies like Dahabshiil, who know the local market, he adds. “This will enable access to finance to be a lot easier than it is now for a lot of entrepreneurs in Africa.”
Remittances remain core to Duale’s mission. “Due to my own experience of conflict and displacement, the importance of remittances is personal to me, as I have seen firsthand how they serve as a lifeline in times of desperate need,” he says.
Remittances are a driver of economic development which help cover living costs, provide seed funding for investment, and fund education, he says.
“They also help reduce migration and foreign aid by reducing desperation and enabling people to start businesses and generate employment at home rather than pursuing the risky strategy of migration.”
