File Image: Somali money changer talks on phone on March 8, 2012 next to piles of banknotes (AFP Photo)
Kenya's president ordered today that the central bank is to issue regulations and then lift restrictions on key money transfer services vital for Somalia suspended over suspected links to the Al-Qaeda-allied Shebab.
Kenya in April froze transfer companies as part of a crackdown on alleged Shebab supporters following the university massacre of almost 150 people by the Islamists.
President Uhuru Kenyatta, in a statement released to mark Islam's holy month of Ramadan, said he had "noted the proposal to lift the suspension of licenses" for 13 registered money remittance providers (MRPs).
"I direct the Central Bank of Kenya to immediately issue comprehensive regulations that guide the operation of MRPs, upon which their suspension would be lifted," Kenyatta added.
No date or further details were given for when the suspension would end.
Aid agencies criticized the shutting down of transfer services, warning it would hit the poorest hardest and jeopardize their operations.
With no formal banking system in the poverty-stricken country, diaspora Somalis use money transfer services to send cash back home to support their families, sending some $1.3 billion (1.1 billion euros) each year, dwarfing foreign aid.
Kenyatta also called for a security "review" during Ramadan. In past years Shebab fighters have intensified attacks during the month of fasting.
"Aware that the enemies of our country may wish to exploit this season, I call upon the entire Muslim fraternity and its leadership to remain vigilant, and do everything in their power, to cooperate fully with the security agencies in order to safeguard this holy month," Kenyatta said.
Kenyan troops crossed into Somalia in 2011 to fight the Shebab, and later joined the African Union force, AMISOM, which is supporting Somalia's internationally-backed government.
The Shebab have since stepped up their operations in Kenya, dealing a blow to plans for the troops to serve as a buffer and protect the long and porous border. that'