Poorest Somalis suffer as worthless shillings pile up in Somalia

Mohamed Gabobe in MogadishuMonday May 11, 2026

So worn they are now being turned away by buses, Somalia’s banknotes have become a symbol of a cash crisis deepened by a dollarised economy and the growing reach of mobile payments, which are driving up the price of basic goods

Muse Omar Jama, 49, sits in his Mogadishu office beside piles of banknotes. He says a government order requiring the Somali shilling to be accepted is being ignored. Photograph: Mohamed Gabobe

When US troops pulled out of Somalia in the spring of 1994, a teenage Muse Omar Jama took a job as an exchange trader in Mogadishu’s Bakara market. More than 30 years on, he is still in the same line of work — though he is no longer sure how long it will last.

Jama, now 49, occupies a plastic chair in a small room he shares with other traders. Outside, auto-rickshaws dart past. Inside, the hum of bargaining has largely disappeared, and conversation between the traders is sparse.

Their battered metal safes, stuffed with millions of Somali shillings, remain shut. Inside them, the paper wealth has all but collapsed in value. “It’s like we went bankrupt overnight,” Jama says.

Last month, a group of Mogadishu traders, exasperated by greasy, torn and aging banknotes, stopped accepting them altogether. Businesses, shops and even bus drivers soon followed, and the practice quickly spread beyond the capital.

The consequences were swift, sending prices for groceries, medicines and public transport sharply higher. A small bag of powdered milk, for instance, has more than doubled in price.

Against the backdrop of rising global food costs and Somalia’s prolonged drought, the poorest people are absorbing the worst of the impact as the economy becomes ever more “dollarised”.

Somalia is among the world’s most remittance-dependent countries, with the diaspora sending billions of dollars home each year, mostly in US currency. Those transfers enter the economy through informal money-transfer networks known in Arabic as hawala. The strong footprint of international actors in Somalia — including the UN, aid groups, foreign troops and security companies — has also helped entrench the US dollar.

Somalia has not printed new banknotes since 1991, when the government of Siad Barre was overthrown, the central bank shut down and the country acquired its reputation as a “failed state”. In the years that followed, the 1,000 Somali shilling note, the highest-denomination bill, became the only currency formally recognised in circulation.

With no shared national currency emerging amid political fragmentation and conflict — and with the breakaway territory of North Western State of Somalia issuing its own shilling — the US dollar and mobile transfers have steadily taken over. Eventually, only Mogadishu and some towns and districts in the south continued to accept shillings.

Before the recent backlash by businesses, people from across the city would come to Jama’s office at Zoobe junction to swap shillings for dollars through mobile money, or to cash in mobile remittances and receive Somali shillings in return.

Now, like hundreds of thousands of others who are not paid in dollars through banks, Jama says his own life has been thrown into disarray.

“Prior to the rejection of the Somali shilling, I was able to make enough to cover the basics such as rent, electricity and water,” Jama says. He now walks the three miles (5km) to work because he can no longer pay bus fares in shillings.

“The rejection of the Somali shillings has hurt poor people the most, even the beggars. They used to be given a couple of thousand Somali shillings by passersby and for them, it was a form of survival that helped them purchase food and small goods but now the notes they have are worthless,” Jama says.

“When they come to me trying to exchange their Somali shillings for mobile money in dollars, I have to turn them away because my safes, shelves and tables are already full of Somali shillings that I’m unable to exchange for US dollars anywhere.”

On 4 May, dozens of exchange traders took to the streets of Mogadishu in protest, waving bundles of old notes and chanting: “Somalia is the only country without a currency.” Jama stayed away, saying he was too discouraged to join them. “It doesn’t seem like things will ever be the same again. Our currency is dead and so is our way of life.”

Asha Ali Ahmed, 39, who sells vegetables at what was once her mother’s market stall in Mogadishu, shares his concerns. “We were raised off the earnings from this vegetable stand,” she says. “I would take the Somali shillings to [the farming town] Afgoye to buy vegetables, then return to Mogadishu and sell them in the market.”

Farmers now refuse to take shillings and demand payment in mobile money, which has pushed vegetable prices higher. “Vegetables were already expensive because of the drought,” she says. “The rejection of the shilling only exacerbated our situation.”

Somalia is facing a severe drought that has led to widespread crop failures, higher food prices and disrupted livelihoods. According to the World Food Programme, almost one-third of the population, 6.5 million people, are facing severe hunger, while 2 million children under five are suffering from acute malnutrition.

“Most people who bought vegetables from my stand were people that could only afford to make purchases in shillings. Paying with mobile money means they have to pay more, and most can’t afford to,” says Ahmed.

In a televised press conference, the federal government said rejecting the Somali shilling would be a crime and instructed traders and businesses to keep accepting it.

But Jama and others question whether the order can be enforced by the fragile state. “The government’s decree to save the shilling is good but we need action to back the directive. There are no police, or anyone for that matter, helping us,” he says.

“What would help would be [for the government] to go to businesses and hold people accountable for refusing to accept the Somali shilling. Even fines would help,” he adds.

Jama leans back in his chair. Across the road, guards keep watch behind mounted machine guns at the ministry of foreign affairs. “Millions are going to suffer,” he says quietly. “More families will be pushed into poverty.”