Somalia set to change old banks notes as inflation hits

Somali currency now has buying power to grow the country’s economy. Photograph: Feisal Omar/Reuters

MOGADISHU, Somalia - For the first time in decades, the Central Bank of Somalia is set to change bank notes following biting inflation which has seen the economy of the country go to slumber, causing massive loss of jobs and subsequent unemployment, which has reached the ceiling.

In the new order, the banknote for Shs1000 will be redesigned to replace those that were generated in 1991, according to Central Bank Deputy Governor Ali Yasin Wardheere who noted that inflation has significantly contributed to the latest communique which sims at streamlining government operations.

At the moment, the phasing out of the notes is ongoing and the new ones will help control the circulation of fake money which has ruined the economy of Somalia. Counterfeits have been in circulation in most parts of Somalia but a number of people have reverted to the use of US dollars.

In 2019, Kenya became one of the latest African countries to replace old notes as a strategy to curb corruption. Similarly, Nigeria, one of Africa's largest economies, has been replacing old currency aiming at preventing hoarding which has been benefiting a few cartels in and outside government.

According to Wardheere, the country has been replacing bills with high-value currency as it seeks to compete for revamping of the economy at both the International Monetary Fund [IMF] and the World Bank. Somalia is one of the countries whose economy has been struggling for decades.

By June this year, Central Bank is set to establish regional offices in Garowe, Baidoa, Kismayu, Dhusunareb, and Jowar in HirShabelle. The central bank had offices across the country where revenue was stored along with the bank notes but the system collapsed following the ouster of Siad Barre.

The new regional Central Bank offices will help the country to easily collect taxes and store money as it seeks to set new standards for demonetization. President Hassan Sheikh Mohamud has been fighting to restore the economy of the country which has struggled for decades.

The bank has also set up a unit “specifically dedicated to combating the counterfeit money market,” Wardheere said. It will also be responsible for maintaining the value of the new money the central bank plans to print and thus help rein in inflation, which has been battered by bad governance.

In his address during the inauguration, President Hassan Sheikh Mohamud insisted that he will use his time in office to regulate the economy by helping various sectors to regain from years of maladministration. He added that the government expects to double the collection of revenue in the coming months.

GAROWE ONLINE