Somaliland: Government bans the use of dollar

[Lamagoodle]

they didn't ban the dollar entirely they banned using dollar as the regular currency. we are not Americans we are somalilanders we should quote Somaliland shillings when paying or selling things in Somaliland markets then pay or receive the amount in Somaliland shillings.

Does not make any sense Yusuf. It is a simple equation; you cannot ban/restrict a currency that you need. That move has been tried in many countries and history teaches us that this move will lead to a total collapse.

Again, I repeat; the value of the somaliland shilling is the cost of printing+ paper + cost insurance and fright. Somaliland does not have gold deposits, it does not sell bonds on the international markets and more importantly it does not have borrowing rights. You have an economy that depends on dollar inflow from the diaspora.

Adeer, ka bax arrintaan. Cilmi uma lihide. This is beyond fadhi-ku-dirir.

Blv you me, the somaliland economy will grow if the dollar becomes the official currency. It will attract capital.

I say ban the somaliland shilling and all other paper currencies instead.

[theyuusuf143]

they didn't ban the dollar entirely they banned using dollar as the regular currency. we are not Americans we are somalilanders we should quote Somaliland shillings when paying or selling things in Somaliland markets then pay or receive the amount in Somaliland shillings.

Does not make any sense Yusuf. It is a simple equation; you cannot ban/restrict a currency that you need. That move has been tried in many countries and history teaches us that this move will lead to a total collapse.

Again, I repeat; the value of the somaliland shilling is the cost of printing+ paper + cost insurance and fright. Somaliland does not have gold deposits, it does not sell bonds on the international markets and more importantly it does not have borrowing rights. You have an economy that depends on dollar inflow from the diaspora.

Adeer, ka bax arrintaan. Cilmi uma lihide. This is beyond fadhi-ku-dirir.

Blv you me, the somaliland economy will grow if the dollar becomes the official currency. It will attract capital.

I say ban the somaliland shilling and all other paper currencies instead.

lama goodle anigu sheekhul kulli baan ahay kitaab aanan ka jawaabin ma jirto kk. horta this decision is made by our government. and it seems right to me. The only thing I am worried about is that the zaad sln may fail because of the long sln shilling digits. most of our people are not advanced mathematically. if zaad brings impressive user friendly system for Somaliland shillings this policy will be very successful. Somaliland shilling value depends on how how we do, la joojiyana banaan la jiifiyaana banaan. not every country have gold deposits or export more things than we do. international markets effects the dollar not our shillings. so I don't understand how our economy can collapse ?

[original dervish]

You know things are seriously wrong when tea shops quote prices in $$$$$$$$$$$.
PS Big businessmen own Somalia's economy...whether in P/L s/l or Somalia proper.
The politicians are all in their pockets....nothing will change.

[LeJusticier]

I think this is a horrible move which will result in hardship; inflation and ultimately financial meltdown especially when the currency is not tied to the global financial system.The value of somali and somaliland currencies is the price of the paper+print. You don't need to an Einstein to know that.

You cannot ban a currency if your currency is not worth more than the price of the paper and print. This is worse than going to a war. How stupid can the authority be? This move will kill the progress that has been made. FDI to Somaliland is in dollars.

You can have a polcy that is outside the monetary domain; tax imports, tax qaad, tax the foreign currency (levy) and create trust for your currency. It is all about trust building. Alternatively, the central bank should buy dollars to reduce demand.

Strict controls such as banning or creating a ceiling will lead to a black market.

P.s. I am surprised! I thought Somaliland had good economists. I would suggest that the dollar should become the official currency. Ban all other currencies; several nations have tried that and that works.

P.s.s I am equally surprised the esteemed readers of somalinet lack basic knowledge of how currencies work.

Walee? I am clueless when it comes to economy!!

[Lamagoodle]

Yusuf iyo LJ,
Hadaad aragtaan dawlad wax mamnuuceeyso, waa dawlad life support ku taagan. Soon they will ban everything left and right

It is a pity; wadankii oo duulaay ayaay dib dhulka loogu soo celiyey.

I am guessing the main reason underlying this schizophrenic move is inflation/ lack of trust for the local currency.

Actually, money has no value parse other than trust. The value of your currency in comparison to other currencies is TRUST. There is no rational for having a currency at all unless you have a closed economy.

Beri waxaad maqleeysaan dawladda waxaay mamnuucday dhuuso

Somaliland needs to increase revenue, fight corruption and tax imports. It should focus on supporting the agriculture. sector.

[gurey25]

Obviously you cannot do this overnight, you will need to gradually create incentives to use the shilling for example by only accepting taxes in shilling.
Exchange rate controls are necessary down the line because it is a matter of sovereignty
There is allot of potential and scope of the local currency if it is managed well,
right now there is zero management , hasty moves like attempting to ban dollar use would simply lead to a blackmarket like you said,
and will be counteractive but at least people are expressing concern about lack of use of the local currency.
and to be honest you cannot fuck up the SL economy anymore than it is already,
it is so close to the floor any fall/crash will not really hurt the poor anymore than the pain they are already in.

P.s. I am surprised! I thought Somaliland had good economists. I would suggest that the dollar should become the official currency. Ban all other currencies; several nations have tried that and that works.

Do you also suggest Somalia use the dollar exclusively too?
This is a matter of sovereignty and any country will have to have its own currency .
The advantages outwiegh the costs .
and all those example of dollarization have been temporary, ecuador is already considering changes so is el salvador.
only tiny island nations, less than half a million people still use it and will continue to for the forseeable future.

[Lamagoodle]

Dear Gurey,
Yes, I support the dollar for both Somalia and Somaliland b4 the establishment of recognised financial institutions.

The dollar is the de facto currency in Somalia and Somaliland. You cannot talk about sovereignty when you have a nation that defies the logic of economic growth, processes and development. Let us leave the bubble of “ wadan qaran baan nahay” for a while. Somaliland and Somalia are not yet part of the economic system. They are not in the institutional systems that govern money, borrow money, release government bonds, there are no sureties etc; all the necessary mechanisms to have a currency. That is basic economic theory. In a way that is a blessing because there is literally no debt owed to financial institutions.

Again, the rate of the somali(land) shilling is the cost of producing it. You cannot therefore ban it, or even set an exchange rate. You are at the mercy of the dollar.


In other words, monetary policy is out of the question.

You ban the de facto currency and you have a parallel system that cannot be sustained.

This is fadhi-ku-dirir nonsense.

What you can do instead is to use an economic policy; Taxation on the commodities and services that are imported (the dollar is the currency here) or alternatively, the central bank (if there is any) buys the dollar to reduce demand

It is funny that you take the example of Ecuador and other countries. These are countries in the financial systems; they have borrowing rights and incur national debt. They embrace the dollar to offset exchange volatility.

I am still of the opinion that Somaliland is on a slippery and sloppy trend. This will be a nail in the coffin for the people. It will erode all the progress that has been made.

[MujahidAishah]

LJ lama is using farta yar yar n basic English somaliland will end up as Zimbabwe if we take the dollar out of circulation..

[Lamagoodle]

LJ lama is using farta yar yar n basic English somaliland will end up as Zimbabwe if we take the dollar out of circulation..

Caashoy, I am very proud of the achievment of Somaliland. But, this move which I call fadhi-ku-dirir economics, will erase every achievement.

This is what happens when you have fadhi-ku-dirism run a country.

[MujahidAishah]

This is what happens when you have badow run the country like what does a macaalin Quraan know about economics iyo inflation..

[Lamagoodle]

Caashoy, it is common for African leaders to become victims of hubris/ grandiose and they take their subjects with them. African leaders suffers from the BIG MAN syndrome as captured by the American journalist/author, Blain Harden;

“His face is on the money. His photograph hangs in every office in the realm. His ministers wear gold pins with tiny photographs on the lapels of their tailored pinstriped suits. He names streets, football stadiums, hospitals, and universities after himself. He carries a silver-inlaid ivory mace or an ornately carved walking stick or a flywhisk or a chiefly stool. He insists on being called 'doctor' or 'conqueror' or 'teacher' or 'the big elephant' or 'the number-one peasant' or 'the wise old man' or 'the national miracle' or 'the most popular leader in the world'. His every pronouncement is reported on the front page. He sleeps with the wives and daughters of powerful men in his government. He shuffles ministers around without warning, paralysing policy decisions as he undercuts pretenders to the throne. He scapegoats minorities to shore up popular support. He bans all political parties except the one he controls. He rigs elections. He emasculates the courts”

They claim that they have a nation; they tell the people that the country is rich; the armed forces are strong and the enemy is weak. They feed the masses the Prozac of a non-existent enemy.

What they don’t understand is that it is all about the economy; in the Somaliland case, it is about digging wells, focus on the agro-sector and support entrepreneurship and education not to mention healthcare.

What do we have instead? Banning a currency that de facto is the official currency. This will bring hardship and possibily cause instability.

It will be the poor that will pay the price.

[theyuusuf143]

This is what happens when you have badow run the country like what does a macaalin Quraan know about economics iyo inflation..

caashay makula tahay shisheeyaa ina xadi karta. waxan uu labagoodle sheegayo waa huuhaa. innaga lacagteenu bakhaaro la yaqaan bay taal jiirna ma cuno.hagbada ama cashuurta zamzam baa gurta oo aan cidna amaah ku qorin.

maqalka ama qasnadana nimanka qarxajis waxa loogu dhiibaa lacala hadii solomadawdu wax ka xado in geela garxajis bail out inoo noqdo yagaa inoogu geel badane. gold deposit kan uu labagoodle sheegayo geela habaryonis baa ka badan. dhaqaalaheenu waa hagbad weynaatay oo inaga uun inagu kooban caalamku shaqo inaguma laha.

[Lamagoodle]

This is what happens when you have badow run the country like what does a macaalin Quraan know about economics iyo inflation..

caashay makula tahay shisheeyaa ina xadi karta. waxan uu labagoodle sheegayo waa huuhaa. innaga lacagteenu bakhaaro la yaqaan bay taal jiirna ma cuno.hagbada ama cashuurta zamzam baa gurta oo aan cidna amaah ku qorin.

maqalka ama qasnadana nimanka qarxajis waxa loogu dhiibaa lacala hadii solomadawdu wax ka xado in geela garxajis bail out inoo noqdo yagaa inoogu geel badane. gold deposit kan uu labagoodle sheegayo geela habaryonis baa ka badan. dhaqaalaheenu waa hagbad weynaatay oo inaga uun inagu kooban caalamku shaqo inaguma laha.

You are funny and I like your sense of homour

Labagoodle, waa maxay?

LOL@@@@@@ Qarxajis.
Anyone funnier than TheYusuf pls stand up.

Yusuf, geelina xaguu daaqa? waa meeqa ULOOD?

Ma maqashay in la yiri Aakhiro nimaan geel lahayn lama amaaneeynin?

[theyuusuf143]

lama waa laba uun baad ka wadaa saw maaha. lama-goodle iyo laba goodle waa isku miduun. financial system ka somaliland sidan u dhigay buu uga dhawyahay sidad adigu u cabirayso ee caalamiga ah. bahalka dhan ba anagu waxaanu ku qiyaasnaa hadba halka qiimaha wankayaga badhida weyn marayo. wasaarada maaliyada nin gacan adag,wadaad ama naag aan qayilin baanu u dhiibanaa. lacagta waxa la dhigaa bakhaarada ilma indha deero, waxaana inta badan masuul looga dhigaa nin kasoo jeeda nimanka isaaqa ugu geel ama lacag badan. cashuurta waxa laga qaadaa dhowr ninoo isaaqa markay xitaa dawladu musrifto yagaa sii bixiya hadii ay hore u waayaan lacagtoodana cashuur dhaaf baa loo sameeyaa ama guryihii faqashtu ka tagtaa qaar lasiiyaa. wuxu waa iska clan business markaanu anagu isqabqabsano ama carabtu adhiga naga iibsan waydo uunbay busaaradu na saamaysaa.

[gurey25]

Dear Gurey,
Yes, I support the dollar for both Somalia and Somaliland b4 the establishment of recognised financial institutions.

The dollar is the de facto currency in Somalia and Somaliland. You cannot talk about sovereignty when you have a nation that defies the logic of economic growth, processes and development. Let us leave the bubble of “ wadan qaran baan nahay” for a while. Somaliland and Somalia are not yet part of the economic system. They are not in the institutional systems that govern money, borrow money, release government bonds, there are no sureties etc; all the necessary mechanisms to have a currency. That is basic economic theory. In a way that is a blessing because there is literally no debt owed to financial institutions.

Again, the rate of the somali(land) shilling is the cost of producing it. You cannot therefore ban it, or even set an exchange rate. You are at the mercy of the dollar.


In other words, monetary policy is out of the question.

You ban the de facto currency and you have a parallel system that cannot be sustained.

This is fadhi-ku-dirir nonsense.

What you can do instead is to use an economic policy; Taxation on the commodities and services that are imported (the dollar is the currency here) or alternatively, the central bank (if there is any) buys the dollar to reduce demand

It is funny that you take the example of Ecuador and other countries. These are countries in the financial systems; they have borrowing rights and incur national debt. They embrace the dollar to offset exchange volatility.

I am still of the opinion that Somaliland is on a slippery and sloppy trend. This will be a nail in the coffin for the people. It will erode all the progress that has been made.

The lack of a mature parallel system is why i am not gung ho about banning the dollar just yet.
I dont think authorities in SL have the experience and ability to manage a financial infrastructure.
I agree that the status quo should be continued till such institutions can be built and mature .
This is also the reason why i do not support a top down monetary policy to address the various economic issues.
I believe we need to think outside the box, to address regional development , unemployment etc.
This is why i support continued dollarization for the foreseeable future, but we should consider Complimentary Community Currencies,
both regional and one devoted to business to business.
There is allot of experience in this around the world, and would be perfect for development, as it would insulate it from corruption.
Communities , even districts and cities could drive their own development and directly deal with aid agencies instead of the aid leaking from the government on its way down to them through graft.