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Somalia to reintroduce Somali shilling after decades of delay
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    Tuesday August 5, 2025


    A money changer in Mogadishu counts Somali shilling banknotes alongside U.S. dollars at a roadside stall. The Somali economy has relied heavily on the dollar for decades due to widespread counterfeiting and the absence of newly issued national currency since 1991. Somalia’s central bank is now preparing to reintroduce redesigned shilling notes in an effort to restore monetary control.

    MOGADISHU (HOL) — Somalia’s federal government is preparing to reintroduce newly printed Somali shilling banknotes for the first time since the country descended into civil war in 1991, reviving a long-delayed initiative aimed at restoring monetary sovereignty and curbing widespread counterfeiting.

    The move, confirmed by Central Bank Governor Abdirahman Mohamed Abdullahi on Monday, is part of a wider economic reform program supported by the International Monetary Fund (IMF). The reintroduction will be governed by a currency board system—requiring every Somali shilling in circulation to be backed by an equivalent value in foreign reserves.

    “The government is working on a plan to issue a new currency,” Abdullahi said during a press briefing in Mogadishu. “Details will be shared once the process is finalized.”

    The IMF formally acknowledged the plan in a July 9, 2025, statement after completing its third review of Somalia’s Extended Credit Facility (ECF) arrangement. The fund praised Somali authorities for maintaining strong reform momentum despite global and domestic challenges.

    “The authorities are also encouraged to continue their work toward carefully reintroducing the Somali Shilling and adopting a currency board arrangement,” said Nigel Clarke, deputy managing director of the IMF and chair of the Executive Board meetings.

    As part of its support, the IMF pledged technical assistance for currency design, monetary policy development, and expanding access to the formal financial system, particularly for populations currently reliant on informal services.

    The shilling’s reintroduction comes after years of unsuccessful attempts. Serious plans to relaunch the currency date back to at least 2017, when the IMF began providing technical support. The World Bank later joined the effort, helping train staff and establish safeguards against counterfeiting. By 2018, the Central Bank under then-Governor Bashir Isse Ali said all technical preparations were complete and a financial aid package of $41 million was being assembled to fund printing. Yet, no currency was released.

    Deputy Governor Ali Yasin Wardheere reiterated in 2023 that redesigned notes were expected by mid-2024, with denominations of 1,000, 2,000, 5,000 and 10,000 shillings. He said old notes would be demonetized before the rollout. That timeline has since lapsed without explanation.

    In the absence of a functioning national currency, Somalia has relied on U.S. dollars and mobile money systems for over three decades. According to a 2017 IMF estimate, nearly 98% of Somali shilling notes in circulation were counterfeit, many printed or imported by warlords and armed groups after the collapse of the central government. This influx of fake notes destabilized the economy and left the Central Bank unable to implement monetary policy.

    That monetary vacuum has led to political repercussions. In 2024, the semi-autonomous Puntland state announced plans to introduce its own regional currency by 2025, citing persistent delays from the federal government and the failure of the Somali shilling to meet local economic needs. Puntland President Said Abdullahi Deni framed the move as a response to financial hardship in rural areas.

    Further complicating Somalia’s currency reform efforts are questions over past transparency. In 2021, former Central Bank Governor Abdisalam Omer Hadliye claimed that Somali banknotes worth $49 million, printed by a German firm, were being stored in a Sudanese warehouse and had never been circulated. The Central Bank has not publicly addressed the claim.

    If successful, reintroducing the Somali shilling will be viewed as a milestone in restoring monetary sovereignty and improving financial governance. However, experts caution that public trust, logistical coordination, and reserve management will be crucial to the effort’s success.

    The Central Bank has not released an updated timeline for when the new Somali shilling notes will enter circulation.

     





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