Somalia Eyes Return to Domestic Currency Amid Dollar Dominance

Somalia is taking steps to restore its domestic currency, the Somali shilling, after relying on the US dollar for 35 years. The Central Bank of Somalia says preparations have reached an advanced stage.

The country's monetary system has been fragmented since the collapse of Siad Barre's government in 1991 and the subsequent civil war. Counterfeit notes spread and the US dollar gradually took over commerce, savings, and electronic payments, including transactions through mobile-money services like EVC Plus.

The use of dollars was also reinforced by Somalia's large diaspora, which sends billions of dollars home through money-transfer networks such as hawala. The presence of international organisations, foreign forces, and security firms also increased demand for dollars.