Somaliland Government Introduces Electronic Payment System for Government Employees

[Deeq A.]

Hargeisa- On the 13^th of January, the government of Somaliland has launched a new electronic payment platform and the government employees will receive their salaries on their phones via this platform named ‘E-Shilling’ from now on.

The E-Shilling program was officially inaugurated in a ceremony attended by the Vice President Mr. Abdirahman Abdilahi (Sayli’i), Minister of Finance Dr. Sa’ad Ali Shire, Central Bank Governor Mr. Ibrahim Baghdadi and the Head of Civil Service Mr. Farhan Adan Haybe, among other high ranking government officials.

The Vice President, who made the official opening remarks, has thanked and congratulated to the Somaliland Central Bank, Ministry of Finance and the Civil Service Bureau for achieving this milestone.

Dr. Sa’ad Ali Shire speaking at the ceremony has noted down some of the benefits of this electronic payment system compared to the traditional cash payment system. In his speech, he cited that this new system will be much more efficient and effective given the fact that the logistics and spending of moving the cash around to distribute it to the employees will be out of the picture. “In my Ministry alone, we spend over 30,000 hours every month paying cash to our employees. We could have spent all that time for more productive work.” Said Dr. Sa’ad.

Also speaking at the ceremony the Central Bank Governor Mr. Baghdadi, said “ All employees are now required to open bank accounts from the Central Bank which has branches in all regions and major cities; the bank accounts will be linked with their mobile phones through E-Dahab platforms powered by Somtel Telecom.”

Furthermore, the Head of Civil Service Mr. Farhan Haybe has spoken highly of the new program, underlining the crucial role it will play in promoting transparency, accountability, and good governance. “The E-shilling program provides paid government employees with direct access to their mobile phone and monthly pay anywhere. The government employees in all regions in Somaliland will now receive their salaries and bonuses on time. This program is a positive step towards accountability and transparency and the elimination of ghost employees and corruption.” Said Mr. Haybe.

On the other hand, the public has received the news of the E-shilling program with mixed feeling. Some of the skeptics are finding it hard to understand how this platform is going to be different from the privately-owned electronic money transfer platforms such as Zaad and E-Dahab. More importantly, many people are wondering about the consequences this will have on the already dwindling use of cash in Somaliland. On top of that, this step taken by the Somaliland government may come as a surprise, given the government has imposed restrictions on Zaad and E-Dahab three years ago to fight off the skyrocketed inflation.

 In 2017, the government has issued a decree banning mobile money transfer dollar transactions less than $100. According to the government, this decision was to encourage the use of Somaliland Shillings to boost its value against foreign currencies and consequently reduce the inflation that plagued the country at the time.  The consequences the E-Shilling will have on the use of Somaliland Shilling Cash, the value of the currency and inflation is still in question.

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