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Somalia seeks $40 million to fund new currency rollout

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Tuesday September 16, 2025

FILE – Proposed designs for new 5,000 and 10,000 Somali shilling banknotes unveiled in 2018 as part of an International Monetary Fund–backed plan to replace counterfeit currency.Mogadishu (HOL) — Somalia’s federal government said Tuesday it needs an additional $40 million to launch a new series of Somali shilling banknotes, a project officials say is vital to stabilizing the economy and curb widespread counterfeiting.
Prime Minister Hamza Abdi Barre told reporters the initiative will cost about $70 million in total. The government has so far secured $30 million in external assistance, though the source of the funds has not been publicly disclosed.
“Printing new currency requires $70 million. We have already received $30 million in aid, but we are still short of $40 million. We want to secure this without taking on loans. We are holding constructive talks with the government of Kuwait and hope they will support us,” Hamza said.

The shortfall has delayed progress on what the government considers a top economic priority. Hamza said Somalia urgently needs to modernize its currency system to restore confidence in the shilling and reduce the country’s heavy reliance on U.S. dollars and mobile money platforms.
The plan is not new. In 2018, the International Monetary Fund (IMF) and Somali authorities designed a two-phase reform program. The first phase focused on replacing old, counterfeit notes with small denominations of 1,000, 2,000, 5,000, and 10,000 shillings, while larger denominations were deferred until financial institutions could be strengthened. The IMF has repeatedly described the currency exchange as a “national priority,” calling it essential to restoring monetary sovereignty and protecting the public from fraud.
The Central Bank of Somalia (CBS), under its legal mandate to issue notes and coins, is responsible for the project. To support the transition, lawmakers are considering a new National Payment Bill, and the CBS has already launched the Somalia Instant Payment System (SIPS) and a standardized national QR code known as SOMQR. These digital systems are designed to integrate with new cash circulation and reduce dependence on counterfeit notes.
The reform also follows major debt relief. Somalia reached the completion point of the Heavily Indebted Poor Countries (HIPC) Initiative in December 2023, cutting its external debt from 64% of GDP in 2018 to less than 6% by the end of 2023. In April 2025, Mogadishu signed an agreement with the Arab Monetary Fund in Kuwait to cancel nearly all of its outstanding debt. Officials say this fiscal space makes it possible to pursue the currency project without adding new loans.
Talks with Kuwait represent the government’s most advanced attempt to bridge the $40 million gap. Somali officials say financial backing from the Gulf state could allow the rollout to proceed without resorting to debt financing or international credit agreements.
Still, challenges remain. Authorities must coordinate with all federal member states to ensure a uniform exchange and acceptance of the new currency. The IMF has warned that without broad cooperation, the risk of fragmentation or parallel currencies could undermine reform. Puntland’s recent hints at exploring its own financial arrangements highlight the political sensitivities surrounding national monetary policy.
For now, the government says its priority is to secure the remaining funds and begin replacing counterfeit banknotes that dominate daily transactions. International lenders, including the IMF and World Bank, have long pressed Somalia to move forward, describing the reform as a critical step to strengthen institutions, restore public trust, and attract investment.

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