By Asha Elmi - Reporter
MOGADISHU, 11 October 2026 Somalia’s parliament has completed the second reading of a bill to amend the Central Bank law, with lawmakers raising questions about Islamic finance, the bank’s independence, exchange-rate provisions and plans to reintroduce Somali shilling banknotes.
The House of the People discussed the proposed amendments during the 22nd sitting of its eighth session on Saturday, which opened with a quorum of 141 lawmakers, according to a parliamentary statement.
Prepared by the Ministry of Finance, the bill seeks to amend Law No. 130, enacted on 22 April 2012. The parliamentary committee responsible for budget, finance, planning, international cooperation and government accountability reviewed the bill’s 63 articles and presented its report on the second reading.
Islamic banking provisions draw scrutiny
Several lawmakers questioned changes to provisions in the existing law that they said explicitly required the Central Bank and other banks to adhere to Islamic banking principles.
MP Abdullahi Arab said a provision on Islamic banking in the 2012 law had been removed from the proposed amendments. He urged the committee to ensure that the revised legislation was consistent with the principles of the Islamic constitution and Sharia.
He also proposed establishing a higher Sharia supervisory committee for the Central Bank to advise on financial transactions and interest-related income that could raise concerns under Islamic law.
Other lawmakers, including Mohamed Abdirahman Nadif, also called for the legislation to be aligned with Islamic principles.
The parliamentary committee said it would consider the issue further and incorporate relevant views into its report for the third reading.
Questions over Central Bank independence
Lawmakers also questioned whether the proposed law would adequately safeguard the Central Bank’s independence while defining the powers of the government and other institutions.
Arab raised concerns about provisions governing the bank’s legal status, monetary policy and the extent of government intervention. He called for restrictions on interference beyond what is expressly permitted by law.
Other MPs called for greater parliamentary oversight of the bank’s leadership, including proposals requiring the Central Bank governor and board members to be presented to parliament for approval.
The committee said it would assess the legislation against the constitution, the 2019 Public Finance Management Law and the national payment systems law. It added that constitutional provisions governing appointments to the bank’s leadership would guide its review.
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Somali shilling plans and exchange-rate concerns
The future of Somalia’s national currency was another major issue in the debate.
MP Mohamed Abukar said the limited availability of Somali shilling banknotes remained a problem, particularly for rural communities, small businesses and people who rely on cash rather than digital payments.
He urged the government and Central Bank to explain the progress made in preparing to issue the currency and when Somali shilling banknotes might become available to the public.
Other lawmakers sought details about the proposed banknotes, including their design, denominations, printing location and production process.
MPs also questioned a provision discussed during the debate that sets an exchange rate of 100 Somali shillings to one U.S. dollar. They asked what economic and legal analysis supported the rate and whether a formal study had been presented to parliament.
The committee said details about the banknotes, including samples, denominations and production arrangements, would be presented at the appropriate stage. It also indicated that it would arrange for Central Bank officials to brief lawmakers on outstanding technical questions.
Further review before third reading
The committee’s report also addresses proposed changes to penalties, the bank’s reporting obligations and other provisions of the legislation.
Under one proposed amendment, the Central Bank’s annual report would have to be submitted by 31 May of the following year. The committee also proposed removing specific fines and prison terms for certain offences from the draft, leaving criminal penalties to Somalia’s penal code.
At the close of Saturday’s sitting, House Speaker Abdiqadir Mohamed Nur Jama said the bill had completed the second-reading stage and directed the relevant committees to prepare reports for the third reading.
The committee said it would review lawmakers’ recommendations and determine which proposals could be incorporated into the revised bill.
The proposed amendments have not yet become law and remain subject to further parliamentary consideration.