Somaliland burns Somali Shillings

[Axmed-InaJaad]

After switching eastern parts of the country to the Somaliland shilling on Tuesday, the SOON TO BE nrecognized state collected and burnt more than 3 billion Somali Shillings on Friday in a symbolic ceremony outside the second city Burao.

 

More than ten lorries carried the ‘worthless’ currency known as ‘Gimbaar’ to an area 10 kilometers outside of Burao where it was destroyed by senior officials from the Central Bank of Somaliland. They said there was no other option but to destroy it as Somaliland rolls out its own currency nationwide. They urged people in Sool and Sanaag regions to prepare themselves for the replacement of the old Shilling currency which is worth 50% less against the Somaliland Shillings.

 

 

 

Bank officials say they will replace more than 20 billion Somali Shillings (worth approximately 10 billion Somaliland Shillings) by mid-June as the country enforces tax compliance throughout all regions and tries to boost its income. They expect the revenue to more than double this year to $100m and hit above $160m by 2013. They insist that the rolling of the national currency is a crucial part of gaining economic sovereignty, as well as being crucial to various fiscal mechanisms. Finally, the government in Hargeisa wants to send a message to its citizens, regional and the international powers that it will challenge Somalia’s claims and prove that it is a functioning government with better economic practices than Mogadishu.

 

The Somali Shilling will remain legal tender in tandem with the Somaliland Shilling until mid-June in some regions, but Somalilanders have been hurrying to change their cash. The central bank said it has already replaced 7 billion Somali shillings ($4.37m) in the Togdher region.

 

A bank official said they will burn the rest of the old valueless currency from neighboring Somalia in the next few days. They added by mid-June, the country will open its first commercial bank to help roll out its own bank notes. Somaliland Central Bank Governor Abdi Dirir Abdi said Banque pour le Commerce et l’Industrie and Dahabshiil Bank, both based in Djibouti, have expressed interest while two other undisclosed banks will be granted license to operate in the country. He added they have also invited other international banks to Hargeisa. The government hopes Somaliland will become a cash-free economy with the help of these commercial banks, money remittance and telecommunication companies with the introduction of debit cards, faster broadband and mobile banking.

 

Locals in Burao and the surrounding areas have welcomed the move and said this marks the end of anything from Somalia which the world continues to associate with Somaliland. “We are slowly shedding our dark history with Somalia, we have moved on, we hope they do the same in Somalia,” said Hassan Jama, a trader in Burao. Others simply said the Somali shilling which is said to value about 1,600 against the US dollar, today lost 4 million clients.

 

Somaliland is a former British protectorate that gained independence June 1960. It later unified with the Trust Territory of Somalia (the former Italian Somaliland) forming what became known as the Somali Republic. However, the union collapsed in 1991 following two decades of internationally-hidden civil war that left more than 50,000 Somalilanders killed. In May 1991, Somaliland declared the restoration of its sovereignty however it has not yet managed to regain international recognition. Somaliland has already forged a range of commercial relationships and has been afforded observer status by the Commonwealth.