By Magdalene Wanja - Reporter
Somalia, 17 April 2026 - In Mogadishu, the Somali shilling is steadily losing its place in daily transactions as traders in several markets reject it altogether.
Once the backbone of commerce, the shilling is now seen as unreliable. Residents turn to U.S. dollars or mobile money to buy even basic goods.
For many, the impact is immediate. “If you bring shillings today, you cannot buy anything,” one trader said. Another resident said he could not board public transport: “I tried to get on public transport... the driver refused the money.”
The rejection reflects a deeper crisis of confidence. Years of depreciation, inflation and inconsistent value have eroded trust, leaving traders reluctant to accept shillings.
“We cannot take this money anymore... it is worn out,” another trader said, citing both declining value and the poor condition of banknotes. Economists say the shilling “has lost public confidence over time,” a trend now visible in everyday exchanges.
Somalia had already been moving away from cash. More than 70 per cent of transactions are now conducted through mobile money, making digital platforms the dominant means of exchange.
The shift is driven by convenience and necessity. “Customers used to bring cash... now small payments are mobile,” a trader said.
At the same time, the U.S. dollar has become a preferred alternative for businesses seeking stability. “People are refusing Somali shillings,” a currency dealer said, describing a trend that continues to accelerate.
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Somalia’s experience mirrors other countries where national currencies failed. In Zimbabwe, hyperinflation in the late 2000s rendered the local currency unusable, forcing citizens to adopt foreign currencies. The government abandoned the Zimbabwean dollar in 2009, stabilizing prices but losing control of monetary policy.
Ecuador made a similar but more structured transition, adopting the U.S. dollar in 2000 after a financial crisis. The move restored confidence and cut inflation but limited the country’s ability to manage its economy.
Back in Somalia, authorities are pushing back. Officials warn that refusing the Somali shilling could carry legal consequences. “Anyone who refuses is committing a crime,” one said. But enforcement may prove difficult if public trust keeps eroding and market behavior shifts.
The impact is uneven. Those without access to mobile money or dollars are increasingly excluded from the economy. Everyday transactions — transport, food — are harder for people who rely on cash. “If I take it, I cannot use it elsewhere,” one transport worker said.
Despite its decline, the shilling still holds symbolic weight. For some, it represents national identity as much as economic function. “We have our own currency... it represents us,” one trader said, reflecting the tension between sentiment and survival.
Somalia now stands at a turning point. The rise of mobile money and reliance on foreign currency are reshaping its financial system in real time.
History suggests that once confidence in a currency is lost, it is extraordinarily difficult to restore. Whether the Somali shilling can recover or will keep fading from daily use remains uncertain. But for many in Mogadishu, the transition is already underway.