UK’s De La Rue on the spot over US$9.6 million Somaliland Contract

ALSO: Britain's De La Rue (DLAR.L) in July 2022 terminated its supply agreement with paper-making firm Portals Paper Ltd as the banknote printer cuts costs during a worldwide transition to polymer banknotes. De La Rue said the 16.7 million-pound ($20.1 million) settlement with Portals will help the company save about 119 million pounds in total by exiting the agreement that was valid for over five more years.

By Newsroom Last updated Oct 9, 2023

By Isaac OGANGA

The world’s biggest printer of banknotes, De La Rue has been urged to cancel a contentious $9.6 million contract to print 380 billion SL shillings for the Somaliland government.

In an open letter to the printer, Sahimiye Foundation noted that the decision to increase money supply in Somaliland could worsen the economic pain that low income and disadvantaged groups of society are currently experiencing.

The Foundation warned that the new bank notes would double the money in circulation and cause the local currency to lose value against the dollar. “

The highly unusual decision to print money, especially at a time when the country is preparing for presidential elections, is predicted to cause the value of the SL shilling to drop from 8,750 to over 20,000 per dollar,” wrote Ismail Ahmed, Sahamiye’s Founder and Director.

Ismail further warned that De La Rue’s Somaliland contract posed serious legal and ethical questions. He noted that there was no competitive bidding nor approval by parliament before De La Rue was awarded the contract.

“I urge you to cancel the contract and return the $9.6 million that the Central Bank of Somaliland sent you to fund the transaction,” he wrote in the letter addressed to De La Rue CEO’s Clive Vacher.

Ismail challenged Clive to take a principled stand given that De La Rue had a history of involvement in corruption scandals and was the subject of several investigations by the UK’s Serious Fraud Office.

Ismail is a UK-based tech entrepreneur and founder of international money transfer service WorldRemit.

He founded Sahamiye Foundation in 2021 to promote education and literacy in Somaliland and the Horn of Africa and advocate for policies that foster development. He in 2021 announced that he would commit more than $500 million of his own wealth to the Foundation over a period of 10 years.