Guess who fears becoming another Zimbabwe!

[AYOUB]

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

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."

 

full articles

[Thankful]

You sound excited??

[AYOUB]

^ You are hearing things.

[Jacaylbaro]

The bank guy is just worried why all those money doesn't come through him ........ he should think better.

[NGONGE]

He's making good sense though.

[Jacaylbaro]

would be a good sense if he is in a normal country niyow ..... this is not the issue he would raise at this stage ....

[NGONGE]

^^ He's talking sense because, eventually, the increase in inflation will mean that people will starve. Printing money should be Sh. Sharif's least worry. Fix the country first.

[Jacaylbaro]

Fixing the country is my point .........

[NGONGE]

^^ Dee he's saying don't make it worse hada.

[Jacaylbaro]

He is not saying ,,,

[NGONGE]

^^

"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."

[General Duke]

Bashir Isse is making real sense, another tragedy of the Sharif Hotel era. They will make quick money and then blame Al Shabaab for their problems.

[RedSea]

[AYOUB]

January 11, 2010 (KHARTOUM) – A batch of new Somali currency will be printed in Sudan following an agreement signed in Khartoum today, Sudan state media reported.

 

The Managing Director of Sudan’s Currency Printing office Mohammed Al-Hassan Al-Bahi signed for Sudan Government while the Somali Finance Minister Sharif Hassan Sheikh signed for his government.

 

The cost of the printing process will top $17 million, SUNA reported

 

The Sudanese minister of Finance and national economy Awad Al-Jaz and the governor of Sudan’s Central Bank Saber Mohammed Al- Hassan were present at the ceremony.

 

Al-Jaz noted the “historical relations” between the two countries adding that the printing of the currency can contribute in realizing stability and development in Somalia. He said that Sudan’s experience in as a country emerging from conflict can be a good experience for Somalia.

 

The Somali minister hailed Sudan’s efforts in achieving peace saying that the presence of legal currency would contribute positively to the economy.

 

Somalia has been seeking Sudan’s help in rebuilding its government’s institution and security forces in a bid to assert control over the lawless country. The issue of currency was discussed during the visit of Sharif Hassan to Sudan last year.

 

Somalia has had no effective central government for 19 years. Regional and international efforts to install one have so far been undermined with rampant insecurity fueled by Al-Shabab Islamic insurgency.

 

 

Sudan Tribune