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Somalia’s federal government says it needs an additional $40 million to move forward with plans to introduce new Somali shilling banknotes, a reform it describes as crucial to stabilizing the economy and fighting widespread counterfeiting.
Prime Minister Hamza Abdi Barre told reporters that printing and distributing the new notes will cost about $70 million in total. So far, Somalia has received $30 million in outside support, though officials have not disclosed the source. He said the government is now in talks with Kuwait to secure the rest of the funds. “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,” Hamza explained.
The lack of funds has slowed progress on what leaders see as one of Somalia’s top economic priorities. The government argues that updating the currency system is urgent to restore trust in the Somali shilling, which has been heavily devalued and widely counterfeited. At present, many Somalis rely more on U.S. dollars and mobile money platforms than on cash in their own currency.
The currency reform plan dates back several years. In 2018, Somalia and the International Monetary Fund (IMF) designed a two-step program. The first phase was meant to replace old, fake notes with smaller denominations of 1,000, 2,000, 5,000, and 10,000 shillings. Larger notes were left for later, after financial institutions had time to grow stronger. The IMF has repeatedly called this project a “national priority” and stressed that it is essential to restoring the country’s monetary independence and protecting citizens from fraud.
The Central Bank of Somalia (CBS), which is legally responsible for issuing money, is leading the effort. To prepare for the transition, lawmakers are reviewing a new National Payment Bill, and the CBS has already rolled out digital payment systems such as the Somalia Instant Payment System (SIPS) and a standardized national QR code called SOMQR. These systems are designed to link smoothly with the new currency and reduce the dependence on counterfeit cash.
This push for reform comes after Somalia’s successful debt relief. In December 2023, the country reached the final stage of the Heavily Indebted Poor Countries Initiative, which cut external debt from 64 percent of GDP in 2018 to less than 6 percent by the end of 2023. In April 2025, Somalia signed a deal with the Arab Monetary Fund in Kuwait to cancel nearly all of its remaining debt. Government officials say this new financial breathing space gives Somalia the chance to fund the currency project without relying on new loans or risky borrowing.
Talks with Kuwait are now the government’s main hope for closing the $40 million gap. Somali officials believe that with Kuwait’s backing, the rollout could finally begin and allow the country to replace counterfeit banknotes that dominate daily life.
Still, there are challenges. For the plan to work, the government must coordinate with all federal member states to ensure everyone accepts and uses the new money. The IMF has warned that without cooperation, there is a danger of creating fragmented or competing currencies across regions. Puntland’s recent signals that it may explore its own financial arrangements show just how politically sensitive national currency reforms can be.
Despite these obstacles, Somali leaders insist the priority is to act quickly. Counterfeit shilling notes remain the norm in markets and daily transactions, making the reform urgent. International partners, including the IMF and World Bank, have long urged Somalia to press ahead, saying the project is key to building stronger financial institutions, restoring public trust, and attracting new investment.