Somalia to Restore Its National Currency After Decades of Dollar Dependence: Media
Somalia to Restore Its National Currency After Decades of Dollar Dependence: Media
Somalia is moving closer to reintroducing the Somali shilling after 35 years without issuing new domestic banknotes, with the Central Bank saying preparations are at an advanced stage:
▪ Parliament reviews amendments for a proposed currency board arrangement;
▪ The bank finalizes regulations on reserve management and foreign exchange.
Why This Reform is Urgent: Several factors are adding pressure to accelerate the currency overhaul
▪ Worn-out shilling notes are increasingly being rejected by businesses;
▪ Somalia faces reduced international support;
▪ Continued security threats from al-Shabaab* are straining state institutions.
These challenges are driving urgent efforts to strengthen public confidence in the national currency.
Decades Without a National Currency:
Somalia’s currency system was severely disrupted in 1991, following the collapse of Siad Barre’s government and the ensuing civil war that followed. The consequences were far-reaching:
▪ The central bank lost its ability to issue and manage currency;
▪ Counterfeit notes flooded the market;
▪ The US dollar gradually became dominant in commerce, savings, and electronic payments—including widespread mobile-money transactions.
* a terrorist organization banned in Russia and other countries
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