Somalia’s Push for New Banknotes: A Step Toward Economic Stability
Somalia’s federal government has announced that it needs an additional $40 million to launch new Somali shilling banknotes. Officials say the project is critical to restoring stability in the economy and reducing the widespread problem of counterfeit money.
Prime Minister Hamza Abdi Barre explained that the full cost of the initiative is around $70 million. So far, Somalia has secured $30 million in external support, though the source of the funds has not been disclosed. Talks are ongoing with Kuwait to help cover the shortfall without taking on new loans.
The plan to print new currency is not new. Back in 2018, Somalia worked with the International Monetary Fund (IMF) to design a two-phase reform program. The first phase focused on replacing old fake notes with smaller denominations. The IMF has repeatedly called the currency reform a “national priority,” stressing its importance for protecting people from fraud and restoring confidence in the shilling.
The Central Bank of Somalia is leading the project, supported by new tools such as the Somalia Instant Payment System (SIPS) and a national QR code, SOMQR, to promote safe and modern transactions.
This reform comes after Somalia achieved major debt relief in 2023, reducing its debt from 64% of GDP in 2018 to less than 6% by the end of 2023. With this progress, officials believe the country now has the financial space to modernize its currency system without relying heavily on new debt.
Challenges remain, especially the need to coordinate with all federal member states to ensure nationwide acceptance of the new currency. However, the government insists this step is vital to strengthen institutions, restore public trust, and encourage future investment.
For Somalia, replacing counterfeit notes with a secure and modern currency is more than just financial reform — it is a step toward long-term economic stability and sovereignty.
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