IMF will print bank notes for Somalia

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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, Thiam 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.

Expansion will be supported by a “boom” in construction, telecommunications, investments in port development and new road infrastructure. Somalia’s “rich waters” also hold untapped potential for commercial fish production, he said.

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. andCommercial Bank of Africa Ltd., neighboring Kenya’s biggest 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,” he said.

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.

Somalia’s new president, popularly known as Farmajo, faces “formidable obstacles” tackling challenges posed by the al-Qaeda-linked militant group al-Shabaab and corruption within the government, BMI Research said Monday in an e-mailed note. Al-Shabaab’s “influence could continue to revive” as an African Union-backed military force, which has struggled to get finance for its operations, starts withdrawing in 2018, BMI said.


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.
 

Thegoodshepherd

Galkacyo iyo Calula dhexdood
VIP
They should proceed with caution and peg the new currency to the dollar. The central bank must be made independent in the constitution so that presidents can not just print money at will. A fixed rate of exchange, I suggest 5 shillings per dollar, will do wonders if it is kept for a number of years. There are a lot of things the government can do that will lead to much greater stability and that can generate legitimacy for it.
 
They should proceed with caution and peg the new currency to the dollar. The central bank must be made independent in the constitution so that presidents can not just print money at will. A fixed rate of exchange, I suggest 5 shillings per dollar, will do wonders if it is kept for a number of years. There are a lot of things the government can do that will lead to much greater stability and that can generate legitimacy for it.

Parliament should fix the rate or make it adjustable to the dollars so the President doesn't have say.

In Denmark the currency is based on the euro due to ERM II agreement endorsed by Parliament.
 
I'd caution about IMF and other financial institutions. They want to privatize agriculture and Somalis resources so it doesn't compete outside markets.
 

Cognitivedissonance

A sane man to an insane society must appear insane
Stay WOKE
VIP
We want to be in bondage to the fiat system take us as your debt slaves with your usury based fractional reserved banking so we may serve the dajjal & his system :ohlord:
 

Madara x

Sleep soundly
@Madara x wuts ur thoughts on this,

@Rorschach summed it up nice by saying 'the slaver offers his yoke"

Usually, i would take a hard line and say f*ck the cadaanyasha and their dollars.

But outright rebelling or rejecting the evil proposals of foreign nations hasn't worked so well for us so far.

The financial institutions of white world obviously want to extract and privatize our resources for their own benefits. We might be given some scraps as incentive to play nice. And i think that to a certain degree we should play nice, while on guard.

We know who are enemies are, and when they make a offer, we know that it is to keep us broken. The question is: is it possible for us to use this deal, which is meant to break us, to build ourselves back up?

What do you think?
 

DeathWish

Hotep and Hebrew Israelite
I believe that it is the wrong time for Somalis to have a currency backed by the dollar because many economists say that there is high chance that the dollar would collapse or will lose much of its value. Tensions in the Middle East and Russia are rising indicating a possible w@r, so Somalis should tread carefully.
 
@Rorschach summed it up nice by saying 'the slaver offers his yoke"

Usually, i would take a hard line and say f*ck the cadaanyasha and their dollars.

But outright rebelling or rejecting the evil proposals of foreign nations hasn't worked so well for us so far.

The financial institutions of white world obviously want to extract and privatize our resources for their own benefits. We might be given some scraps as incentive to play nice. And i think that to a certain degree we should play nice, while on guard.

We know who are enemies are, and when they make a offer, we know that it is to keep us broken. The question is: is it possible for us to use this deal, which is meant to break us, to build ourselves back up?

What do you think?
I think it's best to make the most out of the little scrapes we get then use it for military, security and food/water security, then pay it back asap, we should never privatize all our resources tho especially the oil, we should privatize some sectors but only on a 50/50 understanding terms, btw we shouldn't get into a long term privatization contracts if we ever get to that hurdle.
 

Madara x

Sleep soundly
I think it's best to make the most out of the little scrapes we get then use it for military, security and food/water security, then pay it back asap, we should never privatize all our resources tho especially the oil, we should privatize some sectors but only on a 50/50 understanding terms, btw we shouldn't get into a long term privatization contracts if we ever get to that hurdle.

Honestly tho, we have no say at all.

They could come take everything, and bombs us with drones if we act up.

Or even worse, they could just declare Somalia as American-Somalia.

If they don't want to get their hands dirty for public relations, they'll just pay the ugandese niggas in our territories a lil extra dollaz and tell them to kill us.

We are lying to ourselves if we think that we have the authority to negotiate, when we don't even have a solid military force.
 
Honestly tho, we have no say at all.

They could come take everything, and bombs us with drones if we act up.

Or even worse, they could just declare Somalia as American-Somalia.

If they don't want to get their hands dirty for public relations, they'll just pay the ugandese niggas in our territories a lil extra dollaz and tell them to kill us.

We are lying to ourselves if we think that we have the authority to negotiate, when we don't even have a solid military force.
But I think we can take wut they give us and make the best of it,
 

Madara x

Sleep soundly
But I think we can take wut they give us and make the best of it,

I agree may allah protect us from them.

CX2now0UQAAv0Hy.jpg
 
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