Western Union suspends services in Cabo Delgado, Mozambique

ByRichard C. Sloan

Nov 28, 2021

In addition to the many hardships that the civil war brought to the people of Cabo Delgado in Mozambique, a new hardship has been added: the loss of financial services.

Money transfer giant Western Union has suspended services in the province, with no explanation from the company or the government. Suspension is a problem not only for repeat customers who send or receive money, but also for the vast network of agents who make a living from the fees charged to handle transfers.

Now, in order to get help from friends and family abroad, residents of Cabo Delgado must travel to Nampula, the largest city in northern Mozambique. It is 400 km from Pemba, the capital of Cabo Delgado, and some 650 km from Palma, one of the places most affected by the war.

People have suffered tremendously in the province. Habiba Aboobakar was twice forced to flee her home with her three children, first in Palma after her village in Mocímboa da Praia district was attacked by armed Islamist insurgents in March 2020, and then in Pemba in March 2020. this year when Palma was attacked. Both times she had to leave it all behind.

Recently, she got help from a cousin in Europe, who sent her money through Western Union. But when she arrived at the Pemba branch of Millennium BIM, which conducts Western Union transactions in Mozambique, she was told the service was not available in the province. She then traveled 400 km to Nampula by bus, but “there too I was not paid because my document shows that I was born in Mocímboa da Praia [a town in the northern province]”.

“We are not terrorists,” she said, “we are victims of terrorism.”

Who else is moving money?

Western Union has confirmed that its services in northern Mozambique have been suspended. He didn’t say why, only that he “takes his regulatory and compliance responsibilities very seriously” and makes decisions “based on a risk assessment of our products and services, of our consumers. and our agents, and where we do business. He pledged he was “committed to resuming operations responsibly as soon as possible.”

Preventing people from using formal systems to move money could backfire, according to a new report on insurgency financing in Mozambique.

The report, written by Amanda Lucey and Jaynisha Patel for the Institute for Justice and Reconciliation, notes that concerns have been raised about the use of money transfer services to fund the insurgency.

For example, the East and Southern Africa Anti-Money Laundering Group stated that “the main channels for laundering the proceeds of crime appear to be banks, exchange offices, money couriers and hawala systems” – the latter being informal money networks. transfer agents, widely used in coastal East Africa in particular.

But these same networks are also vital lifelines for people with little access to formal banking.

“Any intervention must first take into account the impact it could have on those who already live on the economic margins of society”, argued Lucey and Patel in the Courier and tutor earlier this year.

The Bank of Mozambique, which regulates the financial sector in Mozambique, did not respond when asked if it was aware of Western Union’s decision to suspend operations in Cabo Delgado. Millennium BIM also failed to do so.

The solution for Aboobakar was to call his cousin to change the recipient’s name to someone else who lives in Nampula. She had to pay this person to get the money for her.

This article first appeared in The continent, the pan-African weekly designed to be read and shared on WhatsApp. Download your free copy here

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