can dahabshiil be considered a somaliland
company anymore?

It has been extensively reported in all the Somaliland media that Dahabshiil Financial Services have inaugurated a bank in Djibouti . Whilst this news seems to be a new step in the banking sector in the Horn of Africa, a deeper analysis reveals a far more negative effect on the  Somal iland economy.

There is no doubt that Dahabshiil has played a significant role in the development of Somalilan d’s economy and development as a conduit for the remittance sent by the Somaliland Diaspora, but Dahabshiil’s share of this market has been steadily shrinking.

So, it makes sound financial sense for Dahabshiil to expand its market. However, by deciding to base itself in Djibouti rather than Somaliland , Dahabshiil Financial Services have a made a  deci sion to will in the long term do more harm to the company.

Granted that Djibouti is a recognized nation and for the moment, Somaliland is not. It is also  qu ite clear that Djibouti’s banking regulations are extremely lax, and there is no doubt there were some financial incentives given to Dahabshiil to inaugurate its bank in Djibouti, but surely, the corporate taxes (if any) that Dahabshiil may have to pay in Djibouti are also needed in  Somalil and.

After all, Dahabshiil’s main markets in the region are Somaliland and Somalia. There is no doubt that Somaliland is stable enough to support the headquarters of Dahabshiil’s bank in the  regi on. As a proof of that point, Dahabshiil recently launched the first ever credit card in the  regio n in Somaliland.

There is also no doubt that the government of Somaliland is willing to offer certain incentives to enable Dahabshiil to conduct its banking sector in Somaliland with minimum interference. Yet, Dahabshiil has chosen to avoid investing in Somaliland by paying taxes and subsequently, decli ning to invest in the future of Somaliland .

Recently, the Somaliland government and the Somaliland House of Representatives have  form ulated and passed new measures to enable the creation of both national and private  commer cial banks. These laws allow the creation of these new banks by strengthening the authority of the Somaliland Central Bank and other regulatory bodies to safeguard the deposits and credits of consumers. The new banks will be expected to follow these rules and will also pay corporate taxes. Dahabshiil has decided not to participate in these new developments.

The people of Somaliland, this author included, believe in the free market and entrepreneurial endeavours. This article doesn’t in any way disparage or envy the remarkable achievements attained by Dahabshiil, Somtel and other successful companies in Somaliland . More power to them.

But an excellent article in Haatuf highlighted the fact that both Somtel and Dahabshiil recorded staggering profits for the past fiscal year, approximately $48 million and $12 million  respectiv ely, whilst paying a paltry $20, 000 each in taxes!!.

There is something wrong with this picture.

Aside from the failure to pay appropriate taxes in order to allow the Somaliland government to invest in the infrastructure of the country and the development of the people, which is what most Somalilanders want, both companies are doing themselves further harm. Let us look at  t wo main consequences of the failure of these two companies to pay appropriate taxes;

If these two companies do not invest in Somaliland by paying the appropriate taxes to help  im prove services and create employment, there will come a point that their markets will reach the point of diminishing return. In the case of Dahabshiil the Somaliland Diaspora will not  conti nue to send remittances at the current rate, and as a banking entity if the economy in  Somalil and doesn’t grow, then no one will have any money to do business or save. In the case of  Som tel, without decent jobs, people will simply not able to afford its services even if the price falls to 10 cents or less.

Both companies, by avoiding paying appropriate taxes in Somaliland are ignoring the cardinal rule of business, expand your market or perish. If neither is willing to invest in Somaliland , how do they expect to create more customers?

These are just two examples, and it is certain others will think of a few more.

Nevertheless, the presumption of political persuasion or the issue of alleged government  corru ption should not be used as an excuse for paying the appropriate taxes. After all neither  corru ption nor political affiliation are exclusive to Somaliland . Recent events in the UK are proof of that.

The government of Somaliland, the lawmakers of Somaliland, the private enterprises and the people of Somaliland must work together to invest in the country. It is in all our interest to de velop the economy of Somaliland and to develop the people of Somaliland , otherwise, it will be back to square one. History teaches us to learn from past mistakes.

The people of Somaliland chafed at alien doctrines such as “scientific socialism”, corruption and nepotism during the ill-fated unity with the defunct Somali Republic , and the seeds for all those ills of that defunct entity was the inability for people to take responsibility for each other and to invest in nation, instead of hoarding it and building palaces. After all, you can’t take it with you and you certainly can’t spend it all.