Western Union suspends services in Mozambique’s Cabo Delgado – The Mail & Guardian

To the many difficulties the civil war has 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, without an explanation from either the company or the government. The suspension is a problem not just for regular customers sending or receiving money, but also for the large network of agents who earn a living from the fees charged to handle the transfers.

Now, to be able to get help from friends or family members abroad, people in Cabo Delgado need to go to Nampula, the biggest city in Mozambique’s north. It is 400km from Pemba, the capital of Cabo Delgado, and some 650km from Palma, one of the places worst hit by the war.

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

Recently, she received 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 carries out Western Union transactions in Mozambique, she was told the service was not available in the province. She then travelled 400km 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 says, “We are victims of terrorism.”

Who else is moving money?

Western Union confirmed that its services in northern Mozambique have been suspended. It did not say why, only that it “takes its regulatory and compliance responsibilities very seriously” and takes decisions “based on a risk assessment of our products and services, our consumers and our agents, and where we do business”. It promised it was “committed to responsibly resuming operations as soon as possible”.

Barring people from using formal systems to move money around could backfire, according to a new report on how the insurgency in Mozambique is financed. 

The report, 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 Eastern and Southern Africa Anti-Money Laundering Group has said that “the main conduits for laundering the proceeds of crime appear to be through banks, bureau de changes, cash couriers and hawala systems” — this last being informal networks of money transfer agents, widely used in coastal East Africa in particular.

But these same networks are also vital lifelines for people who have little access to the formal banking sector. 

“Any intervention must consider first the impact it might have on those already living on the economic margins of society,” argued Lucey and Patel in the Mail & Guardian 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 her cousin to change the name of the recipient to someone else who lives in Nampula. She had to pay that person to fetch the money for her.

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



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