Garowe (PP News Desk) — Businesses in major cities of Puntland have again refused to accept the Somali shilling for transactions despite instructions issued by the Puntland State Government several weeks ago.
Grocers, tuktuk (bajaaj) operators, retailers, wholesalers, fuel sellers and the hospitality sector continue to ask potential customers if they are going to pay in US dollars.
The policy instituted by the Puntland Government last month had set US$ 10 as the minimum amount of money that can be used for mobile money transactions.
Sahal and E-dahab, two major electronic money platforms in Puntland, have not complied with new guidelines.
Poor people and labourers feel the brunt of the dollarisation trend in Puntland, where the shilling is still a legal tender but worthless in the eyes of the business community.
“Small businesses have a right to refuse to accept the Somali shilling if they know they cannot restock their retail outlets due to wholesalers accepting only US dollars for transactions” says a business economist in Bosaso.
In December 2020, Puntland President Said Abdullahi Deni said that there were several machines used to print money illegally in Puntland. Money printed by the administration President Deni had succeeded fuels the depreciation of the Somali shilling against the dollar.
Money changers buy the dollar but do not sell the dollars in exchange for the Somali shilling.
The Puntland Government promised that the government banks will open bureaus de change to enable citizens to buy dollars but this policy has not come into effect.
Only employees paid in US dollars, who constitute less that 4 % of the Puntland population, feel not strained by non-acceptance of the Somali shilling for transactions. Puntland deligitimised the original Somali shilling to flood the market with Somali shilling of its own without considering the impact of unfettered money supply on the local economy.
The result has been the sudden depreciation of the Puntland shilling against the dollar and gradual loss of its legal tender status in Puntland.
Puntland Government senior officials approached by Puntland Post were not available to comment on this story.
This article first appeared in the © Puntland Post, 2021 and is republished with permission