Press Release: The TFG Plan to Mint New Currency Poses Grave Dangers for Somalia

[Shilling]

The TFG Plan to Mint New Currency Poses Grave Dangers for Somalia

 

The Government of Puntland State of Somalia strongly expresses its disapproval to the Transitional Federal Government (TFG) of Somalia’s unilateral plan to issue new currency in an agreement with private contractors in Sudan. Printing new monetary notes with different denominations during this fragile period of political turmoil and economic collapse will have negative implications for Somalia as a whole.

 

The TFG Parliament, the Somali business community and other economic stakeholders were not consulted in plans to issue the new currency. The Puntland Government, which is the main domestic pillar of the TFG that relies on foreign aid for survival, was also not consulted during this secretive process. This raises a question of hidden motives by unscrupulous elements within the TFG, a government that is dependent on African Union peacekeepers (AMISOM) for its own survival in a few blocks of Mogadishu.

 

Minting new currency in Somalia at this sensitive time will be a costly blunder and potentially open new political and security challenges for the international community that supports the TFG. The plan to mint new currency lacks legal backing and poses grave dangers to the fragile Somali economy when one considers the following:

 

a) the nonexistence of monetary policy by the Central Bank of Somalia; and

 

b) the absence of statistical knowledge of money, finance, banking and financial market indicators. There has been no assessment of the amount of money in circulation in the country and the amount needed to be injected into the economy, for example.

 

The top priorities for the TFG should have been to improve security and to rebuild public institutions through a reconciliation process, instead of plotting to flood markets with new money in a unilateral project that endangers Somali families and households.

 

The Puntland Government strongly denounces the minting of new currency and categorically rejects its circulation in Somalia. This dangerous scheme, if not stopped immediately, will give rise to hyperinflation and lead to economic destabilization.

 

We urge the Government of Sudan to prevent the minting of this unauthorized Somali currency on its soil. Likewise, we urge members of the international community to halt this illegal scheme and to protect the Somali people and economy.

 

Government of Puntland, Somalia

Office of the Chief Cabinet

Tel : +252 90 790999 / 794030

E-mail : plpresidencyg@hotmail.com

[Cowke]

You can listen to minister of finance on Horseed media totally blast the tfg live on radio. He is very upset with the introduction of this currency and said it is totally "banned" from entering into puntland regions!!!

 

HM

[General Duke]

Garowe: Dawladda Puntland oo diiday Lacagta cusub ee lugu daabacayo dalka Suudaan.

 

Garowe(AllPuntland)- Dawladda Puntland ee Soomaaliya ayaa markii ugu horeysay muujisay qaraarkeeda ku wajahan lacagta cusub ee ay dhawaan sheegtay dawladda KMG ah ee Soomaaliya, in lugu soo daabacayo dalka Suudaan, taasoo ay sheegtay in ay ka shaqeyn doonto gudaha dalka Soomaaliya, balse taasi waxaa ka biyo diiday dawladda Puntland oo ku sifeysay lacagtaasi mid ladoonayo in dhib loogu geystay Shacabka Soomaaliyeed ee mudada dheer ku soo jiray dhibka baaxada weyn leh.

 

Xukuumada Puntland ayaa isku raacday in aan marnaba lacagtaas la ogolaan in ay soo gasho meel ka mid ah dhulka deegaanada Puntland, waxa ayna uga digeen shaqsiyaadka wada howshaasi in ay joojiyaan, maadaama ay tahay mid ay ku doonayaan in ay ku burburiyaan dhaqaalaha yar ee ka soo baxaya Soomaaliya.

 

Puntland ayaa ku tilmaamay in fikirkan uu yahay mid uu leeyahay shaqsi, luguna doonayo in lugu dhaco hantida Umada Soomaaliyeed, balse ay taasi tahay mid ka caagan deegaanada Puntland, oo aysan cid keeni Karin, iyadoo Puntland ay sidoo kale cadaysay in ay waxba gorgortan ah ka gali doonaan arrimaha lacagtaasi.

 

Wasiirka Maaliyada ee Puntland Faarax Cali Jaamac oo la hadlayay qaar ka mid ah Warbaahinta Puntland, ayaa ku sifeeyey lacagtaasi in loo maray wado guud ahaanteed qaldan, isagoo tibaaxay in aysan xataa isku raacsaneyn sameynteeda iyo qorshaheeda laamaha xaqa rasmiga uleh in ay wax ka ogaadaan lacagtaasi, oo ah Bangiga Dhexe ee dawladda Soomaaliya.

 

Puntland ayaa ugu baaqday Soomaalida oo dhan in ay usoo jeesteen wax ka qabashada xaaladahooda, ayna il gaar ah ku hayaan lacagaha ladoonayo in dhib loogu geysto Shacabka Soomaaliyeed, ee ay wadaan shaqsiyaad ka mid ah dawladda KMG ah ee Soomaaliya, oo maamusha oo kaliya 2 KM oo ka mid ah magaalada Muqdisho ee caasumada Soomaaliya.

 

Jawaabta Puntland ayaa dharbaaxo xoog leh ku ah qaraarkii ay dhawaan meelmariyeen golaha Wasiirada ee Soomaaliya, kaas oo ahaa in lasoo daabaco Lacago cusub, oo aysan isku raacsaneyn gudaha dawladda KMG ah ee Soomaaliya, waxa ayna jawaabta noqon doontaa mid keenta in ay dad badan ka soo horjeestaan qorshaha lacagahaasi.

 

F. C. Maxamed

AllPuntland

[General Duke]

Guess who fears becoming another Zimbabwe!

 

by Own Correspondent Thursday 14 January 2010

JOHANNESBURG – Somalia's central bank chief warned on Wednesday that the anarchic Horn of Africa state could descend into another Zimbabwe if plans to print money went ahead and rebels continued their money laundering activities to fund their operations stoking hyperinflation and further impoverishing the people.

 

Bashir Isse Ali told international media in Kenya that Somalia planned to print money in Sudan, while al Shabaab rebels fighting the country’s Western-backed administration, sends and receives funds via informal money transfer firms.

 

"This move will increase the inflation rate to incredible figures . . . The country will be another Zimbabwe," he said, referring to the southern African country's world record inflation that various sources estimated at between 500 billion and one trillion percent at the height of economic crisis in 2008.

 

"Al Shabaab sends and receives money through this system using individuals, not as an organisation," Ali said, urging more transparency to combat money laundering.

 

However, while it may have never recorded Zimbabwe-type inflation, Somalia has had no central government since the 1991 overthrow of strongman Mohammed Siad Barre sent the country into a conflict whirlpool at the mercy of rival warlords who still control much of the country today.

 

Somalia’s shaky government, which without Ethiopian and Western backing would collapse the next day, controls only a few streets of the capital Mogadishu where gun battles between armed gangs fighting for turf are routine.

 

And with piracy off the coast of Somalia threatening global trade, some may see Ali’s fears of his country turning into “another Zimbabwe” as typical case of the kettle calling the pot black. – ZimOnline

[General Duke]

On inflation, the governor said Finance

 

Minister Sharif Hassan Sheikh Aden planned to print money in Sudan and said this risked sparking runaway inflation that would cause people to starve.

 

Insurgents control most of Somalia, and the Western-backed administration is in charge of only a few streets of the capital.

 

The largely ineffectual central bank reopened in 2007, 16 years after it collapsed in 1991, the year military dictator Siad Barre was overthrown.

 

"The government's lack of control of the whole country cannot be translated to mean that there are no laws. Transparency in the system is important because we have security concerns that money can go into the wrong hands," Ali said.

 

The governor said it was hard for the firms to identify money laundering if it occurred, but they did not deal with foreigners sending money to Somalis or the other way round.

 

An estimated $1 billion in remittances by Somalis abroad makes its way into the country through informal transfers, Ali said in the capital of neighbouring Kenya, where many top officials and elite Somalis live.

 

 

RUNAWAY INFLATION

 

On inflation, Ali said the finance minister plans to print notes with a face value of between 2,000 shillings and 50,000 shillings. Currently, the highest value note is for 1,000 shillings.

 

 

"This move will increase the inflation rate to incredible figures ... The country will be another Zimbabwe," he said, referring to that country's inflation peak of 500 billion percent in 2008, according to IMF figures.

 

"On one hand, the leaders cannot claim they are protecting people, and become part of a plot to kill them. If you shoot them or force them to starve to death, it is the same."

 

 

In 2000, 14,000 Somali shillings purchased a dollar, but the rate deteriorated to 45,000 in 2001 when the government printed more money, Ali said.

 

It has since appreciated to the current 33,000 shillings per dollar after note issue dried up when printing costs exceeded the value of the notes.

 

Ali said the central bank should manage the country's funds and not private companies contracted by government as is the case.

 

The United Nations Development Programme has managed donor money since the central bank's collapse in 1991 and charged 8-14 percent for its services, Ali said.

 

The government contracted PricewaterhouseCoopers (PWC) to take over the U.N. body's services in mid-2009.

 

"The only monetary agent for the government is the central bank. Therefore it is unconstitutional for private financial institutions to be involved in the management of government money," Ali said.

 

"Private companies can be employed as auditing firms, not management."

[Meiji]

Whats to worry? Just get the new version and update the money-printing factories in Bosaso

[General Duke]

^^^Inflation has been curbed in Puntland over the past year and we dont want it to return.

 

If you think this is funny, then you dont care for the "Mog Society" you claim because they will be the most hit, war, over filled refugee camps and now inflation? Its a disaster thats what is worrying most people.

[General Duke]

Shacabka Reer Bosaaso oo kasoo horjeestay in lacag cusub lasoo daabaco.

 

January 20, 2010Dadweynaha ku nool magaaladda Bosaaso ee xarunta gobolka Bari ayaa maanta si kala duwan uga hadlay hadalki dhowaan kasoo yeeray DFKM ah ee Soomaaliya ee ku aadanayd in ay soo daabacayso lacag cusub taas oo dhowaan heshiis kula gashay Dowladda Sudaan.

 

Qaar ka mid ah dadkaasi oo maanta Horseed Media ay mikrafoonka la dhex qaaday ayaa waxaa ay sheegeen in aanay raali ka ahayn in DFKM ah ay soo daabacdo lacago cusub,waxaana ay ugu baaqeen Dowladda in aysan isku mashquulin samaynta lacagtaas maadaama ay dagaal kula jirto kooxaha mucaaradka ee kasoo horjeeda,iyadoo aysan iminka gacanta ku hayn magaaladda caasimada uu ah dalka.

 

Dhegayso qaar kamid ah shacabka Bosaso

Waxaana ay sheegeen in lacagta cusub ee ay Dowladda soo daabici rabto ay sababi karto dhibaatooyin fara badan,waxaana ay muujiyeen in iminka dalka uu burbur ku jiro aysan surtagal ahayn in la keeno lacag cusub.

 

Dadweynaha ayaa waxaa ay intooda badan soo dhoweeyeen hadal maalinimadi shalay kasoo yeeray Wasiirka Maaliyadda ee Dowladda Puntland Faarax Cali Jaamac,kaas oo sheegay in Dowladda Puntland aysan marnaba ogolaan doonin lacagtaas lasoo daabacaayo.

 

Golaha Wasiiradda ee DFKM ah Soomaaliya ayaa dhowaan ansixiyey oo ay isku raaceen in lacag cusub oo Shilin Soomaali ah lasoo daabaco,waxaana arintaas aad uga soo horjeesatay Dowladda Puntland oo ay ku tilmaamtay mid ay wataan Rag gaar ah oo raba in qaab musuq maasukh ku rabaan in ay dalka ku soo geliyaan dalka.

 

Wasiirka Maaliyadda ee Dowladda Puntland oo isna wareysi siiyey Horseed Media ayaa sheegay in Dowladda Puntland ay ka hortagi doonto in lacagtaas in la soo geliyo degaanadda Puntland,waxaana uu sheegay in arintaas aan la gala tashan Xukuumadda Puntland.

 

Arintaan ayaa sababtay muran aad uu xoogan,iyadoo sidoo kale qaar ka mid ah ganacsatada Soomaaliyeed ay iyaguna kasoo horjeesteen.

 

Horseed Media.

[Meiji]

Originally posted by General Duke:

^^^Inflation has been curbed in Puntland over the past year and we dont want it to return.

 

Curbed?.....with what? Piracy ransom-money?

 

Bosaso is known for printing money.

[Saalax]

Another disaster.

[General Duke]

Meiji adeer you are forever lost. You think this will somehow undermine Puntland or will benefit you in some way. Remmeber you was a supporter of the warlords, then thought the fake courts were fab, then thought Nur Cade was a hero and all those ****** turned out to be bad for you and the clan you thought you was helping.

 

Now you bark about Pirates, a minor issue of guarding the coast at best or criminality at worst and in which Pirates are shooting each other in Xaradheere of all places, thus not confined to Puntland.

 

No adeer, Puntland with its competent minister of Finance, i dare say compare him to the illterate Sharif Xasan or Yarisow, has done a great job thus far.

 

Its about brain power adeer..

[General Duke]

Somalia: ill-advised plan to print Somali shilling

20 Jan 20, 2010 - 2:07:15 AM

 

By: Liban Ahmad

 

The Transitional Federal Government’s ill-advised plan to print Somali shilling can undermine federalism, argues Liban Ahmad.

 

The agreement signed by Sudan and Somalia’s Transitional Federal Government to print Somali shilling has drawn criticism from the governor of Somalia’s central bank Bashir Isse Ali. “This move will increase the inflation rate to incredible figures. The country will be another Zimbabwe. On one hand, the leaders cannot claim they are protecting people, and become part of a plot to kill them. If you shoot them or force them to starve to death, it is the same,” Ali told Reuters. The evidence for the governor’s argument lies in the Transitional Federal Government’s decision to print Somali shilling notes of 1,000, 2,000, 5,000, 10,000 and 20,000 and 50,000 denominations. The disappearance of 500 Somali shilling banknote from the market shows the TFG has taken the current inflation into account but failed to consider future inflation in a war torn country whose business community and regional and transitional administrations have printed money between 1994 and 2008. In a study on a private money supply in Somalia published in 2003 Jamil Mubarak pointed out that printing 500 Somali shilling “ banknote [is] no longer profitable.”

 

Sudan News Agency reported cost of the printing Somali shilling for the TFG “will top $17 million.” From this cost one can calculate the amount of money the TFG will print. According to the Jamil’s study US$0.03 was the cost paid to print one banknote. The Transitional Federal Government will be able to inject nearly half a trillion Somali shilling into the market.

 

Puntland State government is not happy with the TFG’s money printing plan. “The top priorities for the TFG should have been to improve security and to rebuild public institutions through a reconciliation process, instead of plotting to flood markets with new money in a unilateral project that endangers Somali families and household” Puntland said in a press release.

 

Somaliland which has its own shilling and a central bank will not, like Puntland, allow the new shilling to be used in territories it controls. The whole exercise will undermine the federalism project and put third parties such as Sudan in an awful position for compromising neutrality in Somalia’s complex politics. If the TFG puts money printing plan on hold and uses consultative approach to monetary policy, then more bridges will be built between the TFG and regions keen on a federal Somalia.

 

If the TFG goes ahead with printing money, the new money will not be distinguishable from pre-1991 Somali shilling to avoid the fate of NA Somali Shilling printed by the former interim president of Somalia Ali Mahdi Mohamed in 1991, a money printing experiment that is a now a footnote to Somalia’s post 1990- private money supply history.

 

Liban Ahmad