The new Somali shilling: what's changing, and when

What's changing

Why a new shilling.

• No official supply: because no official notes have been printed for 35 years, the shillings in circulation are worn, largely counterfeit and "not backed by the CBS" (IMF, 2023).
• Where they came from: after the state collapsed in 1991, warlords and businessmen "contracted foreign printers and imported counterfeit money" (Quartz, 2017).
• What the shilling is used for: the World Bank noted in 2019 that "Over 80 percent of transactions in local markets are low value transactions (around US$ 0.25 on average)". "There are currently no deposits in shillings" (IMF, 2023).

What is planned.

• Currency board: the IMF's December 2025 review describes work "to advance the currency exchange and currency board arrangement (CBA)". A currency board issues notes only when they are fully backed by foreign-currency reserves, at a fixed exchange rate to an anchor currency. The IMF documents Xidig checked do not say which anchor Somalia will use.
• Legal steps: amendments to the CBS Act were expected to go to parliament by the end of 2025. The Central Bank's board was due to approve foreign-exchange regulations by the end of May 2026 and a currency-board balance-sheet regulation by the end of July 2026.
• Co-financing and member states: the IMF notes work "to seek co-financing for the currency exchange project and to reach a firm agreement with all FMS" (federal member states).
• Earlier costings: the World Bank's 2019 concept-stage Project Information Document for a currency exchange project gave a total cost of US$55 million, to support "new, legal, low denomination national currency notes". In 2018 the IMF estimated the first phase at about US$41 million.

Earlier target dates. The project has been delayed before.

• 2024 target: in January 2023 the Central Bank's deputy governor spoke of a new 1,000-shilling note "by 2024" (Central Banking, citing Bloomberg).
• December 2023: the IMF said the exchange "could be carried out in the next two years".

What happened in 2026

• April: traders in Mogadishu began rejecting the 1,000-shilling note, "citing its worn condition and lack of replacement" (Mareeg). Mogadishu's mayor, through a spokesman, said "Anyone who refuses is committing a crime", and ordered municipal taxes to be paid in shillings (Dawan Africa).
• June: Radio Ergo reported small traders and displaced families in camps losing income as "battered, oily" notes were refused.
• July:
  • Status: senior government and central bank officials told Dawan Africa the project had entered an advanced stage.
  • Cost: Deputy Governor Ali Yasin said the nationwide rollout would need more than US$70 million for printing, reopening Central Bank branches, transport and secure storage and distribution. (The IMF had estimated US$72 million in 2023.)
  • Deputy governor: "Printing the currency is the easier part."
  • Timeline: the governor will announce one when the remaining requirements are met (Dawan Africa, 28 July 2026).
• August: "Parliament is currently reviewing laws for a Currency Board to strengthen monetary authority" (Radio Dalsan, 29 August 2026).

Exchange rate. The Central Bank reports an average of SOS 30,103 per US dollar in 2025, 7.1% weaker than in 2024. The first-quarter 2026 average was SOS 31,956. News reports cited market rates of about 28,000 (Hortabin, April 2026) and over 31,000 (TRT Afrika, undated).

Somaliland uses its own currency, the Somaliland shilling. This explainer covers the Somali shilling issued by the Central Bank of Somalia.

What it could mean for everyday payments

• Small change: without usable small notes, small purchases get rounded up. The World Bank's 2019 plan was for low-denomination notes, which could ease this.
• Mobile money in shillings: in a 2017 World Bank survey, almost 90% of those surveyed said they were interested in mobile money in local currency. The Central Bank's 2026 survey found 87% of adults use mobile money, and only 19% hold a bank account.
• Payment systems: the Somalia Instant Payment System (SIPS), launched in January 2025, is designed to connect banks and mobile-money operators.
• Credibility: the IMF says the currency board will need "fiscal sustainability and central bank independence" to stay credible.
• Remittances: remittances are about a fifth of GDP (IMF). Xidig found no official statement on whether they would be paid out in shillings.

Where Xidig members may contribute

Learning and service openings, not confirmed contracts or tenders:

• Fintech and mobile-money developers: shilling wallets, pricing and conversion features.
• Small-business owners: pricing and cash handling during a changeover.
• Accountants: record-keeping in two currencies.
• Community educators: explaining the change, and warning against scams, in Somali.

Questions still to be answered

1. Has the Central Bank announced an issue date, denominations and exchange procedures?
2. Has parliament passed the currency board law and the Central Bank Act amendments?
3. How will old notes be exchanged, and for how long?
4. Will mobile-money operators offer shilling balances?

What is confirmed, and what isn't

Confirmed

• No CBS banknotes since 1991, and the IMF's counterfeit estimate.
• The IMF-supported currency board plan and its legal steps (December 2025 review).
• The Central Bank's 2025 average exchange rate.
• SIPS (January 2025).

Our interpretation

• Past delays suggest the transition may take time.

Not yet verified

• The issue date, denominations, printer and exchange procedures.
• Whether the 2026 regulations and laws have been adopted.
• The reported market exchange rates, which come from news reports.

Related reports

• Somalia's economy at a glance: the latest figures, with sources
• Somalia's Bankable Projects 2026–2030, explained