The Man Who Modernized Somalia’s Economy

As a boy, he loved school and herding animals. As a young man, he became a businessman; and as a businessman, through a personal will, he revolutionized an entire industry and became a national pillar

ABDIKARIIM JAMA

The economy of Somalia has been built by the indomitable spirit of private sector leaders. Sheikh Ahmednur Ali Jum’ale, the Founder of Barakaat Group of Companies, has led this group of business titans for close to half a century.

In March 2020, he was awarded a Lifetime Achievement Award during this year’s SABA Awards. This was in recognition of his outstanding contribution to Somalia. The award was presented to him by the Prime Minister, Hassan Khaire. His entrepreneurial journey is that of innovation, resilience and faith in the people around him.

The Somalia Investor Magazine sat down, in Sharjah- UAE, with the man who pioneered the modern Alternative Financial System (AFS) in the world and revolutionized how global citizens conduct their financial transactions. The resulting conversation stretched from his childhood, thirst for education, his entry into the business, the highs and lows of entrepreneurship, how to build a successful corporation, and the secrets to his enduring spirit.

Who is Mr. Jum’ale?

I was born in El Buur District, Galguduud region of Somalia back in 1954 and at the age of two years, my mother was divorced. I spent my early years in a tough environment as an animal herder until I was six and a half; I was then sent to memorize the Quran until I was nine in Elbur and Garabla. I did my primary and intermediate schooling in Elbur and Beletweyne, which had teachers from the US Peace Corps. Eventually, I made my way into Mogadishu’s Benadir Secondary School where I completed my high school in 1975.

In 1975 I traveled to several East African countries. Being an ambitious young man, I was determined to travel to the US for further studies. In fact, I secured admission into one of the universities in the US, but due to financial limitations, I couldn’t travel. Instead, I traveled to Saudi Arabia in 1976, where I got employed in a Saudi-based bank: British Bank of the Middle East (now called HSBC).

I left the bank in 1979 and attempted to start my own textile and transport business- both were unsuccessful. When the businesses failed, employment was my only option, so I got employed again, this time working in Jeddah, Saudi Arabia, for a port-based Marine Transport company. I moved back to the banking industry in 1980 after securing a job at CitiBank and stayed there until 1986, having worked in all departments at the bank.

It is while at CitiBank that I undertook several banking and financial related management training at their training institute in Riyadh. This enhanced my financial and banking sector knowledge tremendously.

I established Al Baraka (later Barakaat), a Money Transfer and Commission Agency in Saudi Arabia in 1986. Barakaat was perhaps one of the first modern money transfer systemS across East Africa. The company has grown in size; the services we offer have increased, the size of the team has multiplied and the area we served has exponentially expanded.

Unfortunately, the company assets were frozen in November 2001. From that day up until recently (early 2020) most of our focus was on de-listing the company and its management from the terror financing list in the US and the United Nations. Both the company and management were finally vindicated early this year, 2020. This was the collective effort of all Djibouti government, successive Somali governments; as well as the people of Somalia, partners, friends, and well-wishers who stood with us directly or indirectly.

In addition to our de-listing efforts and consulting roles, I have been part of other national projects too. For instance, in 2007 I was instrumental in setting up the Somali Business and Investment Council in Djibouti.

Tell us more about your journey in business…

Business challenges are opportunities that one can capitalize on. You can say that I have had a relatively successful run at business. Of course, not all of it is made of high points, there are a few lows too. For example, as I mentioned before, in 1979 I tried to set up a textile business. This venture failed to pick up. Similarly, I set up a transport business which also ended in failure.

Relocating my money transfer business operation center from Saudi Arabia to the UAE, where most Somali businessmen shifted their operations to, was another challenging time during my entrepreneurship journey. It is hard to relocate your business from its comfort zone into a new operation center, inevitably with new challenges.

In 1991, when the central Government of Somalia and the national telecommunication infrastructure collapsed, our business operations were adversely affected because reaching the beneficiaries of money transfers became difficult. We were forced to come up with a new system of identification and thankfully got it from the Koran verse 49:13 “O mankind! We created you from a single (pair) of a male and a female, and made you into nations and tribes, that you may know each other (not that you may despise (each other)”. Somalis are clan-based society since time immemorial; we decided to use this to identify beneficiaries.

Before 1991, as you may know, Mogadishu was the center of the country’s economy; ‘One Country, One City’ where the accessibility of the payees was easier. When the civil war broke out, people dispersed to different regions and districts. There was no technology to facilitate getting our services to beneficiaries beyond Mogadishu. This was another major obstacle that affected our operations. We had to procure High-Frequency Radios (HFR) and install them in each region and district. Doing this allowed us to reach beneficiaries in their respective localities. Later on, wherever our telecommunications infrastructure reached we have replaced the HF radios with modern telecommunication equipment.

The backbone of my business was the financial sector. Handling money is a very delicate and sensitive thing. There is an unexpected rate of loss due to breach of trust or due to other factors. We used to incur losses at any given time with some of the money transfer agencies; however, we used to offset the loss from the profits we used to make.

The biggest challenge in my business life so far happened in November 2001 when the then US president held a press conference linking Barakaat Group of Companies to al-Qaida. Our offices in Dubai were cordoned off, our bank accounts were frozen and all the cash at our offices got confiscated. Our equipment such as computers and laptops were taken away, our global agent offices were also closed and their bank accounts were frozen. Most of the management, including myself, were detained and then released. We were suddenly in debt to the tune of millions the next morning.

How did you personally manage this situation?

Sincerely speaking, the event came with great pressure and impact. I started blaming specific individuals. People I was told were behind the incident. I would like you to know this; faith is an important aspect when it comes to managing business challenges. The belief and faith that a solution will be found are important.

During this time, while reading the Quran, I came across Sura 42:30: “Whatever misfortune befalls you, it is because of what your hands have committed. Yet He pardons much.” After deep introspection, I began to hold myself accountable and responsible instead of blaming others. This Ayah inspired me to let go of the blame I held against others. Afterward, the event became less stressful, allowing me to focus on addressing the aftermath.

How did you manage to repay the millions of dollars that had been frozen?

Across the world, bankruptcy is well managed and has provisions that are useful for addressing both the bank and its clients. For example, in the US, there is Chapter 11 – of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. It also offers room for the option of paying creditors over time. In Somalia, we had no such law.

Word had gone out to the public that contrary to Barakaat’s slogan “Hand it to Barakaat and Take it from Barakaat” it had become, “Hand it to Barakaat and Take it from President Bush”. Fortunately, the Somali people were sympathetic to our situation and they understood the depth of the matter. We also assured them that they would receive their money Insha’Allah.

We started paying back 25% to the people within a short period of time from cash in Somalia which was not frozen at the time. In some parts of the world, our agents hired lawyers and their bank accounts were accessible to them once more. This also helped us pay back some of the remittance-in-transit. At the same time, we began disposing of some of our assets to pay back the depositors and pending remittances.

Things further improved when in 2014, Barakaat was de-listed from the United Nations Sanctions List, giving us access to our UAE bank accounts. We got some money out and used it to settle some of the outstanding dues.

This positive turn of events in the middle of such a tough period gave me stronger faith of the words of the Messenger of Allah, peace, and blessings of Allah be upon him: “Whoever takes the money of the people with the intention of repaying it, Allah will repay it on his behalf, and whoever takes it in order to destroy it, then Allah will destroy him.”

At the recent Somalia Annual Business Awards (SABA) 2020 Gala, you were awarded the SABA Jury Special Award 2020: A Lifetime Achievement Award. What are the key achievements that you can say you have realized in your life?

Over the last thirty years, financial services have been the backbone of our economy and a lifeline to the people of Somalia. To be the pioneer and mastermind of the modern Somali Money Transfer business, laying down the procedures and systems together with my colleagues is one of our greatest achievement and an honor.

This invention – Americans called it an “Alternative Financial System” when they were investigating Barakaat – is a system that was and still is a trust-based business.

Due to the growth of the client base of the remittances and trade industry; we established Barakaat Bank of Somalia; the first bank in the nation after the collapse of the financial system in 1991, offering fully-fledged banking services.

Barakaat has for the first time in Somalia deployed the first mobile network; also, in 1995 Barakaat has succeeded in bringing Somalia the services of the worlds’ largest long-distance carrier AT&T of the USA.

As a result, we have built a complete nationwide end-to-end digital network with almost full coverage of the country. Our telecommunication company has penetrated clan borders and succeeded in connecting millions of Somalis. This has allowed people to use the services of the company and made their lives much easier. We gave thousands of people an opportunity to own shares in it too. On top of this, we have created thousands of jobs for our people.

Lastly, I am glad that I, together with Barakaat Group of Companies and management, have all been cleared, through a robust legal process, of the allegations made against us some 20 years ago and all the lies and innuendos have been proven wrong. I am happy that truth prevailed and we are vindicated at last. I count this as another big lifetime achievement.  

As you said, you and Barakaat Group of Companies were vindicated early this year. What is the way forward for Barakaat brand?

One of my top priorities for now, regarding Barakaat Group of Companies, is to seek an audience with the US Government with the view of soliciting compensation. Our assets and bank accounts were frozen by the US for 20 years. We seek compensation for the heavy damages imposed upon us.

What is your retirement plan?

Although I am getting closer to my retirement age, I am working on putting forward a signature project that I think will have a much greater impact on our society. The project is still in our drawing board and will be made public when it is ready insha’Allah.

Once that signature project kicks-off, I will be able to retire and dedicate my time and energy to charitable works that will have a greater contribution to the well-being of our society. 

Barakaat Group of Companies Milestones:

Barakaat Group of Companies has created several large businesses in Somali:

1. Worldwide money remittance system
2. Banking across all regions of Somalia
3. Telecommunications (mobile, fixed and international) across all regions of Somalia
4. Coca-Cola Bottling Company
5. Trade across all regions of Somalia
6. Nationwide Real Estate and Construction Projects

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