26/05/2026
How mobile money helped finish off the Somali shilling.
The growing refusal of old Somali shilling notes in Mogadishu’s markets has exposed a hard truth: Somalia’s national currency is no longer just collapsing in value; it is disappearing from daily life.
For traders, the shilling has become difficult to price, exchange and trust. For poor families still holding worn-out notes, it remains one of the few forms of money they can access.
Between those two realities lies a monetary crisis shaped by state failure, dollarisation and the rise of mobile-money platforms. Together, they have made the US dollar the country’s most convenient currency and pushed the Somali shilling further to the margins.
The shilling did not reach this point because of one company, one service or one decision. Its decline began with the collapse of the central government in 1991, when Somalia lost the institutions that should have protected its national currency. But mobile money helped turn that long decline into a new economic order. It did not create the crisis, but it made the dollar-based alternative faster, easier and harder to reverse.
A currency without protection
For more than three decades, Somalia has lived with a currency that the state failed to renew, defend or modernise. The country has not issued credible new national banknotes since the fall of the central government.
The old 1,000-shilling note, now the most common paper currency still in circulation, has become weak, worn and widely distrusted. Many notes are damaged, while others are suspected of being counterfeit.
In many markets, the cost of counting, carrying and exchanging shilling notes has become greater than their practical value. That is where the crisis has moved from economic theory into daily hardship.
A national currency needs more than a name and a symbol. It needs a central bank that can manage supply, protect value and maintain public confidence.
It also needs clean notes, enforceable rules and a strong enough state to make people believe the money in their hands will still be accepted tomorrow. Somalia failed to provide that confidence.
As a result, the market adjusted to the state’s failure. Traders priced goods in dollars, landlords demanded rent in dollars, importers used dollars, and businesses increasingly treated the shilling as a secondary currency.
Over time, the Somali shilling moved from the centre of commerce to its margins. Mobile money entered this landscape not as the original cause of the crisis, but as the system that made the new reality easier and almost irreversible.
The dollar in every pocket
EVC-Plus, operated by Hormuud Telecom, became one of the most influential payment systems in south-central Somalia by solving real problems. It allowed people to send, receive and store money on their phones without relying on cash or formal bank accounts.
It reduced the need to carry banknotes through insecure streets and helped traders avoid bundles of weak shilling notes. In a fragile economy, that convenience gave mobile money a level of trust the national currency no longer enjoyed.
For ordinary Somalis, the benefits were clear. A shopkeeper could receive payment instantly, a family member could send money across the city, and a customer could buy food, transport or phone credit without touching a banknote.
But the same system also carried a deeper consequence. Because many mobile-money transactions are settled in dollars, the platforms normalised the dollar as the everyday currency.
People no longer needed to hold Somali shillings to participate in much of the market. They only needed a phone balance in dollars.
That change weakened the shilling further. A currency does not die only when its exchange rate falls, but when people stop needing it.
A private platform with public power
It would be unfair to claim that Hormuud Telecom alone killed the Somali shilling. The shilling was already in crisis long before mobile money became dominant.
War, state collapse, counterfeit notes, insecurity, weak regulation and the absence of new banknotes had already damaged the currency. The Central Bank and successive governments failed to rebuild trust in the shilling when they had the responsibility to do so.
But it would also be wrong to ignore the role mobile-money companies played in the final stage of the currency’s decline. They filled a vacuum left by the state and built payment systems that worked when public institutions did not.
Hormuud Telecom, in particular, did more than offer a convenient service. Through EVC-Plus, it helped build a dollar-based payment culture so dominant that, in many parts of the country, the national currency became almost optional.
In practice, the company came to occupy a role closer to that of a national payments institution than to that of an ordinary telecom operator.
Vast sums of private money moved through its platform, while public oversight struggled for years to catch up with the scale, speed and systemic importance of the service.
That success brought profit and influence, but it also carried a national cost. A private company helped shape how millions of Somalis store, price and exchange value, while the state struggled to defend its own currency.
It also created a danger Somalia can no longer ignore. When one private platform becomes central to everyday payments, any technical failure, liquidity shock, cyberattack, misuse or loss of public trust would not remain a company problem.
It could quickly become a national financial crisis.
This is the uncomfortable truth behind Somalia’s monetary crisis. The country’s most successful financial innovation grew on top of its deepest monetary failure.
Mobile money gave people speed, safety and convenience. But it also helped make the national currency unnecessary in ordinary commerce.
The poor pay the price
Dollarisation does not punish everyone equally. Business owners with dollar accounts can adapt, importers can adjust prices, and traders can protect themselves through exchange rates.
People with regular access to mobile money can also keep up with the market. The poor have fewer ways to protect themselves from the collapse of the shilling.
Many low-income families still handle Somali shilling notes. Small traders, street vendors, casual workers, displaced families and rural communities often remain closer to the cash economy than the formal dollar economy.
When the shilling weakens, they lose value. When markets reject old notes, they lose access to the goods and services they need most.
A worn-out note may mean little to a large business. To a poor family, it may be the difference between buying food and going without.
That is why the current rejection of old shilling notes in Mogadishu is not only a technical currency issue. It is a social crisis that falls hardest on people who had the least power over the system that created it.
The people who suffer most are not those who designed the system, profited from it or failed to regulate it. They are the people left holding a currency their own country no longer protects.
Restoring monetary sovereignty
Somalia does not need to fight mobile money. That would be unrealistic and harmful in a country where digital payments have become part of daily life.
Mobile money has improved access, reduced risk and made commerce easier for millions of people. No serious reform should try to take Somalia backwards.
But Somalia cannot build a credible economy if its national currency remains an afterthought. The federal government and the Central Bank must treat the shilling’s decline as a national priority.
They must move faster to issue credible new banknotes, remove counterfeit and unusable notes, and regulate foreign-currency digital wallets. They must also rebuild confidence in the national currency before the habit of using it disappears completely.
Private payment platforms should support public monetary policy rather than quietly replacing it. Mobile-money operators, including Hormuud, must recognise that their platforms are no longer ordinary private services.
They have become part of Somalia’s financial infrastructure. That gives them influence, but also responsibility.
The state failed the Somali shilling first, and the market then moved on. Mobile money made that move easier, faster and more permanent.
The result is a country where the national currency still exists, but no longer commands daily confidence. Not only did Somalia lose the value of the shilling, but it lost the habit of using it.
By: Ali Muhiyaddiin
