Fake notes batter Somali economy

The glut of banknotes has caused prices to soar

By Julian Bedford

The interim government in Somalia is being criticised for failing to prevent the importation of huge amounts of forged currency into the country, which has caused economic chaos.

About $3m-worth of forged Somali shillings arrived in the capital, Mogadishu, on Wednesday, under an armed escort paid for by local businessmen.

Since then, the Somali economy has been in freefall.

When the notes began to circulate, the central Bakara market was closed following protests from the small businessmen who conduct most of the trading.

MPs, too, have criticised the government for allowing businessmen to import the currency which has reportedly been printed in the Far East.

Government accused

This is not the first time that forged notes have been brought into the country.

The government is reported to receive a cut of the proceeds from such deals and it relies on this percentage to pay civil servants, and rent for its offices.

But though the money may keep the government afloat, it has ruined the fragile economy that operates in Mogadishu.

Inflation is again rampant and the price of everyday goods has soared, leading to demands that the government puts an end to this practice for once and for all.

It has not been an easy start to the year for the interim government in Somalia.

Under pressure from regional leaders for its attempts to assert its authority throughout the country, the government now faces criticism from within its own heartland.