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Offline Bimat

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Somalia to Resume Printing Banknotes in 2017
« on: June 14, 2014, 02:25:14 PM »
SOMALIA: Minister of Finance says government to print new banknote

Posted on June 14, 2014

Mogadishu (RBC) The Minister of Finance of the Federal Government of Somalia Hussein Abdi Halane has revealed that the government in developing a new policy to print a new banknote for the country, RBC Radio reports.

Currently the Somali currency is diminishing in terms of value and quantity as foreign currency, particularly the U.S. Dollar hits the markets in the Horn of African nation.

“We are planning to print new banknote for the country. The ministry has set a strategy to print the banknotes and we have discussed with the cabinet meeting,” Minister Halane.

The minister whispered that the government considers to check whether the new banknote will change the former currency the shilling which is the only currency used in the country as the nation’s currency.

“The current currency is very low in its quantity and its value. To replace it will take long time to be effective so we are looking on that,” he added.

Somali government and the International Monetary Fund [IMF] The wold’s monetary body discussed the phenomena, according to the minister.

Two years ago, the government suspended a new banknotes printed in Sudan which the former Transitional Government made its order in the fear of inflation. It is not clear whether the government is now planning to reprint the same banknotes or will be bring out new currency.

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Offline Enlil

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Re: Somalia to Resume Printing Banknotes in 2017
« Reply #1 on: June 27, 2014, 02:45:39 AM »
They should just issue the banknotes of higher value. Public are probably more concerned with with the civil strife that currency.

Offline eurocoin

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Re: Somalia to Resume Printing Banknotes in 2017
« Reply #2 on: February 05, 2016, 09:58:21 PM »
Somali central bank chief seeks new currency to rebuild nation


Few central bank chiefs have been jailed by a dictator or hide a loaded pistol in their desk draw, should Islamist militants decide to call. Bashir Issa Ali has done all that, and now he wants to recreate Somalia's currency from scratch.

[...]

The tattered shilling notes still in circulation - worth about 4 U.S. cents - are emblematic of Somalia's descent since 1991, when dictator Mohamed Siad Barre was toppled by warlords who carved up the country into personal fiefdoms.

[...]

PRESSURE TO PRINT

[...]

The same problems dog Ali in his efforts to print the new currency. "We don't have the financing," he told Reuters on a visit to the Kenyan capital of Nairobi.

The 1,000 shilling banknote is the only Somali bill in use, and so small is its value that money changers in the Mogadishu bazaar need wheelbarrows to move about any meaningful amounts.

The Central Bank of Somalia estimates about 1.3 trillion shillings ($56 million) are in circulation, but this includes counterfeit currency printed by warlords who used the fake notes to prop up their militias.

Ali said Somalis accept the forged notes due to chronic shortages of the authentic pre-war currency. "People use it even though they know it's fake," he said.

Since the central bank last printed notes, the economy has become virtually dollarised. In bustling bazaars and restaurants most Somalis use the electronic mobile phone payment system, known as EVC. Dollar bills also circulate, with shillings used only as small change.

Yet Ali said the poor, elderly and those who do not own phones need a new currency that is credible and practical. He estimates printing costs at $20-$22 million for banknotes of 1,000, 2,000, 5,000, 10,000 and 20,000 shillings.

Seeking help from the International Monetary Fund (IMF), Ali has proposed Somalia adopts a "currency board" to peg the shilling to the dollar, a system used by Hong Kong since 1983.

[...]

His second stint ended in 2010, when he resisted a government plan for Sudan to print a new Somali currency. Boxes of those banknotes remain stacked in a warehouse in Khartoum, he said.

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Offline Bimat

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Re: Somalia to Resume Printing Banknotes in 2017
« Reply #3 on: May 28, 2016, 09:48:36 AM »
Somalia Intends to Print Its Own Currency by Early Next Year

27.05.2016. 21:05

Somalia intends to print new official bank notes that will circulate alongside dollars in the Horn of Africa nation by early next year as the government seeks to replace counterfeit currency and promote commerce in an economy ravaged by civil war.

The International Monetary Fund is helping Somalia print and circulate the currency, Bashir Issa Ali, governor of Somalia’s central bank, said Friday in an interview in the Kenyan capital, Nairobi. Somali shillings currently in circulation aren’t printed by the federal government in Mogadishu and most are fake, Ali said. The new banknotes would be produced by “reputable companies,” he said.

The economy is overwhelmingly dollarized,” Ali said. “Poor communities and those in rural areas have no access to dollars. They will benefit most from the shilling circulation.”

Somalia’s economy was destroyed by conflict that erupted after the ousting of dictator Mohamed Siad Barre in 1991 and the emergence of the al-Shabaab Islamist insurgency. President Hassan Sheikh Mohamoud’s government is stabilizing the country and confidence among investors is increasing as the security situation improves, Ali said.

While the central bank has no reserves, Ali said the country receives about $1.5 billion a year in remittances from Somalis abroad. Neighboring Kenya, east Africa’s largest economy, received $1.55 billion in remittances from citizens living and working abroad last year, according to data from the Central Bank of Kenya.

The new banknotes will be a step toward formulating monetary policy, Ali said. Effective economic management and planning is difficult without an official currency, he said.

“Printing money is very important for Somalia’s national payment systems and for our national pride,” he said.

Source: Garowe Online
« Last Edit: May 29, 2016, 12:31:03 AM by Figleaf »
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Offline Bimat

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Re: Somalia to Resume Printing Banknotes in 2017
« Reply #4 on: February 12, 2017, 07:26:32 AM »
Somalia says it will resume printing currency soon

12th February 2017

Somalia intends to resume printing banknotes this year for the first time since the government collapsed in 1991.

The governor of Somalia’s central bank, Bashir Issa Ali, told VOA in an exclusive interview Saturday that all technical preparations are complete, and his government is confident it can assemble a financial aid package within three months to fund the printing program. Further work would take another four months.

Asked if Somalia will print and distribute banknotes during 2017, Ali answered: “Absolutely. Absolutely. Absolutely!” He pledged the new currency would include “good, reliable security features.”

Pre-1991 banknotes have disappeared from Somali markets, replaced by either Western currencies, including dollars, or privately printed notes, most of which are worthless fakes.

Financial reforms to take hold soon

Ali said international institutions, such as the World Bank and the International Monetary Fund, as well as the U.S. Treasury, have been helping Somalia reform its financial sector and train central bank staff.

“We have prepared all the issues and all the basic groundwork, and put in place the technical requirements,” he told VOA.

Outgoing Somali President Hassan Sheikh Mohamud met a key demand of the international community last year by signing into law parliament-approved legislation to outlaw money laundering and “financial terrorism.”

The Somali government needs $60 million to be able to begin printing banknotes. Ali said he expects to obtain pledges for that sum at an international donors’ conference for Somalia in London in May.

“We expect the international community to assist us with that issue,” the bank governor said.

Private banks, ‘mobile money’

Hardship and the scarcity of trustworthy currency has created opportunities for some innovative strategies in the private sector, Ali said, and Somalia has made some progress in establishing private banks and mobile money systems.

Many transactions in Somalia now take place using “electronic mobile money,” Ali added.

Somali shillings account for a small portion of the payments system, he said.

“Most of it is done through dollars and electronic money, which is a great thing for … saving costs and effort and very convenient, also.”

Remittance companies that relay payments from Somalis working abroad operate in many parts of the country, Ali noted, but a large part of the nation does not have access to electronic funds or dollars, so there is an urgent need for a reliable national currency.

Once Somalia-printed banknotes begin to circulate, the central bank governor said, his staff will be able to regulate and control operations by private banks and remittance services.

The bank now has trained staff members to work on the financial and exchange systems, and training efforts are continuing. On February 12, he said, “more than 10 staffers are departing for training about counterfeiting and financial controls. They include staff from the bank, police and the national security agency.”

Monetary policy comes next

Since Somalia does not yet have its own currency, it also lacks a monetary policy, Ali said, but once the banknotes begin circulating, he looks forward to “the beginning of a new era” in the East African nation.

“Monetary policy always must come together in close collaboration with the fiscal policy of the government — taxation and revenue, the public budget and these kind of things,” Ali told VOA. “We don’t apply any monetary policy at the moment.”

Economists have recently predicted a slowdown for Somalia’s domestic economy, which largely relies on livestock exports. Ali said a “very disastrous” drought has killed thousands of farm animals.

“When you don’t have enough crops, it will contribute to food shortages,” he said. “When you have drought problems, you will not be able to export livestock.

“That will affect our foreign market and our exports,” he added, so Somalia’s foreign-exchange earnings will decline.

“When you get less foreign exchange, you will not be able to import what is required,” the bank governor said, “and when you import less, there will be less tax revenue for the government.”

In the short term, the peaceful election of a new Somali president appears to have helped the nation’s economy. The Somali shilling rose in value compared with the U.S. dollar over a two-day period; $1 brought 22,000 shillings before the election in Mogadishu, and by Saturday it was trading at 16,000 shillings.

“It’s a matter of expectations. There is a new government, new environment and new atmosphere,” Ali said, and that will have an effect on people’s opinions about security, the economy and the stability of the government.

Source: Mareeg
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Offline Bimat

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Re: Somalia to Resume Printing Banknotes in 2017
« Reply #5 on: February 20, 2017, 04:21:10 AM »
IMF to Help Somalia Print First Banknotes in a Quarter Century

By Felix Njini
Update On: February 20, 2017, 4:45 am
February 20, 2017, 4:30 am

(Bloomberg) -- The International Monetary Fund is backing Somalia’s plans to replace tattered currency notes that were printed before the Horn of Africa nation plunged into civil war almost three decades ago.

The new Somali shilling notes may come into circulation this year, alongside the dollar that’s been the main means of payment, and will replace fake or old currency in circulation, said Samba Thiam, the IMF’s country head.

“About 98 percent of the currency circulating in the country is fake,” Thiam said in an interview Friday in Nairobi, the capital of neighboring Kenya. “The remaining 2 percent is currency printed during 1990-91, still circulating, but in very bad shape.”

Somalia’s descent into anarchy began with the ouster of dictator Mohamed Siad Barre in 1991. A subsequent Islamist insurgency has hastened the destruction of its political and economic institutions, slashing annual per capita income to $435 and making Somalia the world’s fifth-poorest country, according to the World Bank.

Printing of the new notes, which will initially be in small denominations, is aimed at restoring the Central Bank of Somalia’s powers to set monetary policy, he said. While the institution doesn’t have the money to finance the plan, donors will back the reforms and financing will be agreed on once the government decides whether it wants a floating- or fixed-rate currency regime.

Debt Cancellation

While Somalia qualifies for debt cancellation, it would have to clear arrears that are part of $5.3 billion owed to international creditors such as the IMF, World Bank and African Development Bank to secure fresh funding, Thiam said. Writing off Somalia’s loans depends on progress toward curbing corruption, introducing a new currency and an effective monetary policy in the $6 billion economy.

“There are hurdles,” Thiam said. “But there is a general willingness from creditors to write off Somalia’s debt when the time comes, it’s a good prospect. They will not be asked to repay the debt tomorrow, so they have time to work on consolidating their economic base. The debt is an issue that will be resolved some time.”

Economic growth may slow to 2.5 percent in 2017 from 3.7 percent last year, the IMF estimates. Agriculture accounts for 40 percent of national output in the country whose main export is camels to Gulf Arab countries.

The IMF is also assisting the central bank with regulation and supervision of the financial sector to open it to new investors,
Thiam said. KCB Group Ltd and Commercial Bank of Africa Ltd, neighboring Kenya’s first and sixth-largest banks by assets, are among lenders that have applied to set up shop. Somalia has six banks and 12 money-transfer businesses.

Better Governance
Somalis living abroad have buoyed the economy with remittances of as much as $2.3 billion a year, Thiam said. “We pretty much think the amount that could be going unnoticed, undeclared must be much bigger.”

President Mohamed Abdullahi, elected into office this month, must make good on his word to fight graft, Thiam said. Somalia is the world’s most corrupt nation, according to Berlin-based Transparency International.

Improving governance may enable the nation to exploit potentially “quite large” oil and gas reserves, Thiam said. The government has said production could begin as early as 2020 after exploration by companies such as Royal Dutch Shell Plc, Exxon Mobil Corp. and BP Plc showed probable offshore hydrocarbon deposits. The state has held talks with those companies about reactivating dormant contracts.

Source: Bloomberg
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Offline Bimat

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Somalia to Resume Printing Banknotes in 2017
« Reply #6 on: October 07, 2017, 09:36:54 AM »
Somalia Months Away From Having New Currency

October 06, 2017 10:55 AM
Harun Maruf

WASHINGTON —

The Somali Minister of Finance says the International Monetary Fund (IMF) is taking the lead in helping Somalia with a grant to print new currency before the end of this year.

Abdirahman Duale Beileh says the IMF will work with the Somali government.

“IMF is ready, from wherever they going to get that money, to help us,” he said. “There are other sources, but we are going to go through IMF.”

In an exclusive interview with VOA Somali, Beileh said the Somali government needs $100 million, half of which will go directly toward printing the new money, and the other half to keep the value of the currency when it circulates.

“The cost of printing the money is about $50 million, and I think there is also about same amount, same quantity will be necessary to deposit and keep it as a reserve to monitor the movements of supply and demand to keep the value,” he said.

He said the cost was the only outstanding issue before printing the money. Strengthening governance issues, accountability issues, skills available in the central bank, the rules and regulations, the monetary systems, the policies, all of these prerequisites have been concluded, Beileh said.

“We are now discussing the timing,” he said.

The Somali central bank has not properly functioned since 1991. The country’s old currency has almost disappeared or is worn out and was replaced by U.S. dollars, or privately printed notes, most of which are worthless fakes.

Coins, paper money

The government plans to issue both coins and paper money. The only banknote that is still used is the 1,000 Somali Shilling, which buys a cup of tea or a packet of chewing gum. Beileh said this will be the starting number for the new money.

The “1,000 Somali shilling will be the smallest denomination of coin. The biggest bank note of the new currency will be either 10,000 shilling or 20,000 shilling … there is still discussion on this and is yet to be finalized,” he said.

Reliable sources tell VOA Somali that the government plans to print several billion shillings, but Beileh refused to specify the amount.

“I’m not privy to the numbers but it will be adequate for the economy of Somalia,” he said.

Beileh said the target has always been to print the money toward the end of the year. The money will be released to the market during the second quarter of next year, he said.

Big challenges

One of the biggest challenges will be implementing the mechanism for replacing the old currency and more importantly what to do with the counterfeit money that has been in the markets for many years.

“That really will be the test,” Beileh said. “The counterfeit will be difficult to give good money against bad. It came by exchange of their own funds or their own goods and services but on the other side we need to control that counterfeit money, there will be some decisions that needs to be made as to how much of this bad money should get good money, a lot of talk has to go into that.”

He said the positive thing is that the amount of counterfeit money circulating may not be a lot.

“It’s not a lot when you look at the whole economy, I think it’s around may be 10 percent or 20 percent of the total money circulating.”

Poverty profile

Meanwhile the World Bank has released a new report about poverty in Somalia. The survey finds poverty in Somalia is widespread, with every second Somali living in poverty. The survey was conducted last year and is representative of 4.9 million Somali. Somalis are estimated to be 12 million. The areas it does not cover are nomadic people and inaccessible zones because of the conflict.

Utz Pape is a poverty economist for the World Bank. He told VOA Somali that the survey was the first comprehensive snapshot of the welfare conditions of the Somali population.

“What reports finds and states very clearly is that every second Somali lives in poverty, and by poverty we mean living below $1.90 per day, that is the 2011 power purchasing parity estimate,” Pape said. “This means large part of the population is poor, but we also see there are very large disparity between different groups and geographical areas. Household that were displaced tend to be much poorer than everybody else. But also we see a divide between rural household, which tend to be poorer than urban household.”

The report says poverty is high among the internally displaced people with 7 out of 10 poor. It says more than 1.1 million Somalis, or roughly 9 percent of the population, are considered to be internally displaced.

Pape says there are other non-monetary poverty indicators in Somalia, such as lack of access to infrastructure, clean water, poor sanitation facilities, lack of electricity and limited access to roads. Limited access to education and health and the other indicators is also highlighted in the report.

The World Bank says only 58 percent of Somalis have access to an improved source of water and 10 percent to an improved sanitation, compared with an average of 69 percent and 25 percent in low-income sub-Saharan countries.

Asked about what could be done in Somalia to reduce poverty, Pape said “resilience.”

“Resilience is important to avoid deepening poverty and to avoid additional household falling into poverty,” he said.

Remittances and entry points for different policies and programs, such as social safety net programs or other programs that build up resilience in poor households, access to education and access to health care can improve the conditions, Pape said.

Source: Voa News
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Offline Figleaf

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Re: Somalia to Resume Printing Banknotes in 2017
« Reply #7 on: October 12, 2017, 11:21:06 AM »
Everyone is saying all the right things. Now, let's see what action is taken.

Peter
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