The founder and chairman of World Remit, Ismail Ahmed, has accused the Central Bank of Somaliland of printing new Somaliland shillings and releasing electronic money into the market, which has caused the devaluation of the Somaliland shilling.
In a Facebook post on September 23, the chairman of the International Money Transfer urged the Somaliland government to address the extreme devaluation of the Shilling to avoid economic collapse. He emphasized that the amount of shilling circulating in the market is more than it can bear, causing its price to fall.
“The Central Bank stopped measures to strengthen the Shilling and put dollars in the market. Instead, the Central Bank has introduced digital currency to the market, which exceeds the amount of printed notes. Additionally, the Central Bank has been preoccupied with printing other money, which has eroded confidence in the Shilling,” Ahmed said.
Ahmed underscored that the combination of these challenging circumstances has led to a problematic situation in the exchange market. The devaluation of the Shilling will particularly impact government employees, impoverished people, and rural populations whose income is in Somaliland shillings.
However, the Central Bank of Somaliland rebutted Ahmed’s accusations on Monday and vowed to take legal action against him for baseless allegations against the Bank and its leaders, creating chaos in the country’s exchange markets.
The Bank stated that it has not printed any money in the last seven years and has no plans to print new money that would further burden the exchange markets and the country’s economy.
The chairman of World Remit also mentioned a by-law that allows the management of the Central Bank to charge a 2.5% fee when money is printed, which theoretically encourages money printing. However, the Bank clarified that there is no 2.5% interest from money printing, as no money was printed in the last seven years.
The Bank of Somaliland also refuted Ahmed’s claim that the printed Somaliland shillings are equivalent to 30 million dollars, stating, “There is no difference between the money circulating in the market and any other money of any kind.”
“In the last six years, the Central Bank has managed to raise the value of the Shilling by 21% and has also maintained the stability of the exchange rate, which has hovered over 8,600 Somaliland Shillings for the last five years. The Bank of Somaliland has successfully managed exchange rate stability, even in the face of global challenges such as the COVID-19 pandemic, the war in Ukraine, and the burning of the Wahen market,” the Central Bank declared.
The Central Bank admitted that there had been a 3% increase in the dollar value compared to the Somaliland shilling in recent months.
Ismail Ahmed, the founder and chairman of World Remit, posted an invoice on his social media claiming it was issued by the company for printing money, indicating a total of $1,902,587.10 was sent to the company.
However, HOL did not independently verify the invoice on Ahmed’s Facebook page.
The Bank of Somaliland granted World Remit Somaliland Company a license in 2018, but the company voluntarily revoked its license in March 2022. According to the Bank, World Remit does not maintain an office or employ staff in Somaliland.