Somalia is preparing to issue new Somali shilling banknotes for the first time in 35 years, with the central bank confirming that preparations have reached an advanced stage. The move comes at a time when traders in Mogadishu have begun rejecting old banknotes due to their deteriorating condition, and the government is seeking to restore monetary sovereignty.
The initiative is significant as it represents a major step toward rebuilding the country’s financial system. Parliament is currently reviewing laws for a Currency Board to strengthen monetary authority, while the central bank is finalising regulations for reserve management and foreign exchange. These efforts aim to restore public confidence in the national currency and reduce reliance on the US dollar, which has dominated Somalia’s economy for decades.
There are several reasons behind the urgency of this plan. The current shilling notes have severely deteriorated, with some reportedly tied together with string or elastic bands to keep them intact. In April 2026, traders in Mogadishu began refusing old banknotes, making it difficult for many people particularly low-income households to pay for basic goods.
The move also comes amid declining international support. The United States has announced it will end funding for the African Union mission in Somalia (AUSSOM) by 2027, increasing pressure on the government to strengthen its domestic institutions and reduce reliance on foreign aid.
Restoring the Somali shilling, however, is not without challenges. It will require rebuilding public trust while strengthening banks and financial institutions. The Somali economy has long been heavily dollarised, with the US dollar used for trade, savings, and mobile money transactions.
