The Banknotes of Somalia – Part 4

Peter Symes

The Somaliland Issues

Following the breakup of Somalia, on the overthrow of Siad Barre, the Northern Region of Somalia, that had formerly been British Somaliland, declared itself independent on 18 May 1991. Although Somaliland has never received recognition from the international community, this has not stopped them establishing an infrastructure that reflects their ambitions as an independent nation. Included in this infrastructure is the use of their own currency, which was introduced in late 1994.

            In September 1994 the Somaliland parliament endorsed the use of a national currency and requested that the Baanka Somaliland, the central bank of Somaliland, prepare a plan for introducing the currency and recalling the old currency. It is understood that the new currency had been printed by this time and that the endorsement of the parliament for the new currency was a formality. However, it appears that insufficient planning had been undertaken for the introduction of the new currency at this time, resulting in a delay to the release of the currency.

            The new currency was ultimately placed into circulation in November 1994 at an exchange rate of 50 Somaliland shillings to the US Dollar and one Somaliland shilling to 100 Somali shillings. The period of exchange was a lengthy period of three months and on 13 January 1995 the prime minister of Somaliland, Mohamed Ibrahim Egal, announced to journalists assembled at his office in Hargeisa that the currency of Somalia would cease to be legal tender in Somaliland after 31 January 1995. Within a short period, the Somaliland shilling gained widespread acceptance, with reports that it was being accepted as far afield as Djibouti and Kenya.

            The banknotes issued by the ‘Baanka Somaliland’ consisted of six denominations – 5, 10, 20, 50, 100 and 500 shillings. The four lower denomination notes are all the same size (120 x 53 mm) and they share a common design. The front of each note has an historic house called ‘Goodirka’ as the central motif. This building was used as Somaliland’s House of Representatives after the declaration of independence and this was its status when the banknotes were printed. The building is now used as the Supreme Court of Somaliland. To the left of the illustration is a geometric pattern and to the right is a kudu—again showing the importance of this animal as a symbol of the region. The value of the note is written in English in the top left, bottom right and along the bottom of each note. Arabic is used in the top right and bottom left, while the value appears in Somali only along the bottom of the notes. The place and date of issue, ‘Hargeysa 1994’, appears below the title of the issuing authority, while one serial number appears at the bottom left and two signatures appear at the bottom centre. The notes are signed by Barreh Hajj Omer , signing as the Guddoomiyaha (Governor), and Abdi Mohamoud Gullet, signing as the Lacaghayaha (Cashier).

            Each of the lower denomination notes is printed in a two-print design. Brown, blue and purple are used for the under-print and for the principal design features on each note. A second print uses a colour in two shades as a border on each note, which holds the title of the issuing authority and the value of the notes. The colour is different for each denomination, with the 5-shilling note bing green, the 10-shilling note purple, the 20-shilling note brown and the 50-shilling note blue. Similar colour schemes are used on the back of each denomination, which all bear a common illustration that depicts a man, a boy and three camels in the foreground, with the twin-hills of Naasa-Habloid, located near Hargeisa, in the background. An attempt has been made to create a perfect registration device on these notes, with a bird set in an octagon on the back of the notes that registers with the geometric design on the front of the notes.

            The four lower denomination notes are printed on paper embedded with fluorescent fibres and each denomination has a fluorescent feature on the front of the notes. Printed in ink that is invisible under normal light, the denomination of the note appears in western and Arabic numerals when the note is submitted to ultra-violet light. In addition, the signatures, the titles of the signatories, and the serial number all fluoresce under ultra-violet light. There is no watermark and no security thread used in these notes.

            The 100- and 500- shilling notes share a common design, although the 500-shilling note (145 x 66 mm) is larger that the 100-shilling note (135 x 62 mm) and both are larger than the four lower denomination notes. Both notes share a common multicoloured under-print. While the 100-shilling note has a burgundy and brown intaglio print, the 500-shilling note has a light blue and dark blue intaglio print. The intaglio print is used to provide the text indicating the denomination of the notes, the name of the issuing authority and the illustration of the tree-shaded headquarters of the Baanka Somaliland. In addition, an intaglio panel at the right holds a latent image of ‘BS’ (for ‘Baanka Somaliland’). Both high denomination notes carry two serial numbers. The back of each note carries a multicoloured design, although the 500-shilling note is predominantly blue and the 100-shilling note is predominantly brown. Both notes carry the same illustration of a flock of sheep, presumably being herded toward the ship in the background. Live sheep exports are a significant source of income to Somaliland.

            Fluorescent features, similar to those used on the lower denomination notes, are used on the higher denomination notes. That is, the serial numbers, signatures, titles of the signatories, and the place and date of issue fluoresce, as well as embedded fibres and the denomination of the notes in Arabic and western numerals which are invisible in normal light. In addition, some inks on the front and back of each note also fluoresce. It is not known where the banknotes were printed, although one report states they were printed in the United Kingdom and another report states that the notes were printed at an estimated cost of US$1.4 million.

            The introduction of a national currency was extremely important to the political powers of Somaliland. The new currency was seen as a tool whereby international recognition could be achieved through acceptance of the currency and, if it was accepted, it could represent a reliable currency through which trade could be undertaken in the region—particularly when compared to the Somali shilling. The new currency enhanced the ruling party’s reputation as a dominant political and economic force, not only in Somaliland, but also in the region. The change in currency also created profit for the Somaliland government. Following the period of exchange, where Somali shillings were exchanged for Somaliland shillings, the government sold the Somali shillings to various merchants in Somaliland (who were able to use them in parts of Somalia and Ethiopia where they were still accepted). The Somali shillings were sold to the merchants for US dollars, which provided hard currency for the government to support its war-torn economy.

            However, the introduction of the new currency was not a panacea for Somaliland’s problems. In August 1995 Somaliland authorities were forced to adjust the exchange rate to one US dollar to 80 Somaliland shillings. At the same time, the government was facing problems with merchants who were dealing in US dollars rather than Somaliland shillings. By September 1995 problems with inflation had caused enough concern to stir the government into activity and numerous actions were taken to secure the economic position of the country. Most of the actions concerned the control of trade, particularly in relation to imports, but the use of the Somaliland shilling as the only legitimate currency in the country was reinforced and all foreign organizations and companies had to exchange their foreign currency at the central bank.

            As the situation continued to deteriorate, the Somaliland government prepared to introduce a law in January 1996 that allowed the central bank to fix the exchange rate for the Somaliland shilling and forbade the use of most other currencies. The Ethiopian birr and Djibouti franc were exceptions, being allowed to circulate at an official exchange rate. On the black market the Somaliland shilling was trading at 400 to 450 to the dollar, whereas the official rate hovered around 80 shillings. The announcement of the intended introduction of the law brought wide-spread condemnation from aid agencies. Ultimately, it is not known whether the law was introduced, as various reports during 1996 suggest that the Somaliland shilling was floating in the market.

            A report by the UN Department of Humanitarian Affairs on 15 January 1997 indicated that, during the first half of December, the Somaliland shilling fluctuated between 5,335 and 5,600 to US dollar, but later in the month the currency appreciated to 4,500 to US dollar; with immediate effect on prices of essential commodities and fuel for residents. While this report may be interpreted to refer to the currency on the black market, another report by the Financial Times in 1998 states: ‘When the governor of Somaliland’s central bank wants to find out how his currency is faring against the US dollar he walks out on to streets of Hargeisa ... and trades a few hundred dollars with money changers who sit in the dust’. This suggests that there was no direct control over the exchange rates by this time and the apparent floating of the Somaliland shilling led to a requirement for a much greater amount of currency.

            This necessitated a new issue of notes and the new notes were the same as the 1994 issue—with three exceptions. Firstly, only five denominations were issued, with the 5-shilling note being discontinued. Secondly, the 50-shilling note was issued in a larger format, now measuring 130 x 57 mm. Thirdly, Ahmed Abdi Mohamoud now signs the notes as Guddoomiyaha. However, there is an anomaly with the 50-shilling note as there are two varieties of this denomination—with the variation being determined by the signatures. It appears that the 1996-dated 50-shilling notes were first introduced in early 1996 and they can be distinguished by the use of the signature pair that is used on the 1994-dated notes. When all denominations were later issued with the 1996 date they carried the second signature pair, resulting in the 50-shilling varieties.

            The 1994-dated notes and the first 1996-dated 50-shilling note appeared on the collector market in great numbers, not only in their issued format, but also with overprints to celebrate the fifth anniversary of Somaliland’s declaration of independence. The overprints consist of two different sets of text. The first overprint consists of four lines:

5^th Anniversary of

Independence 18 May 1996

Sanad Gurada 5ee

Gobanimadda 18 May 1996

The second two lines are the Somali equivalent of the first two lines. This overprint is in gold, while the second overprint is in silver ink and is three lines of Somali text:

Sanad Gurada

5ee Gobanimadda

18 May 1996

            A February 1996 report from Reuters stated that ‘Two foreigners in banker’s suits’ were in Hargesia to pick up ‘new British-printed Somaliland shilling banknotes for collectors in New York and London’. It is probable that the visit of ‘two foreigners in banker’s suits’ may be linked to the manufacture of the overprints. It is probable that the two foreigners took notes dated 1994 and the first 50-shilling note dated 1996 to be sold on the collector market and to be overprinted with the anniversary text. This in turn suggests that the first 50-shilling note dated 1996 was released during or prior to February 1996 and that the other 1996-dated notes were released after February 1996. It is not known whether the overprinted notes were actually placed into circulation in Somaliland and there is a suspicion that the overprinted notes were prepared solely for the collector market. It is not known whether Baanka Somaliland was involved in, or approved of, the overprints.

            In 1999, or shortly thereafter, another release of banknotes was made, which consisted of just three denominations: 50, 100 and 500 shillings. All three notes were the same as the previous issue, except for the change of date (to 1999), and a change in signatory, where Abdirahman Dualle signs as Guddoomiyaha.

            A 500-shilling note dated 2002, with a silver windowed security thread, and a 100-shilling mote with the same date have also been issued. Coins dated 2002 in the denominations of 5, 10 and 20 shillings have been issued, suggesting that the 50-shilling note is now the lowest denomination note in circulation (although this denomination is yet to be reported with a date of 2002). However, as inflation increases, the use of higher denomination notes will increase and the use of lower denomination notes will decrease.

            Somaliland banknotes dated 1994 and 1996 flooded the collector market and these notes can still be found quite easily. However, notes dated 1999 and 2002 appear to have been ignored by many banknote dealers and collectors will find it difficult to obtain these notes. The Somaliland issues are summarized in the following chart:

(Notes marked with an asterisk (*) were issued with the gold and silver overprints.)

            Despite inflation, it does appear that, to a certain extent, the economy of Somaliland is stabilizing, following numerous problems with drought and exports over the years. However, Somaliland and Somalia remain in turmoil as the struggle for economic and political dominance by the various factions continues. By 2000, the situation in Somaliland had not improved with respect to trading in currency. The matter had become complicated due to the circulation of various currencies printed by several administrations, war lords, and businessmen in Somalia. Banknotes prepared by the administrators of Puntland appear to have been the most prevalent of the currencies circulating in Somaliland while not sanctioned as legal tender.

            With talks undertaken between the various factions over many years, and new initiatives established in 2004, the chance of a united or federated Somalia continues to look promising. If either of these options include Somaliland, the future of the Somaliland shilling may be limited.

The Future

The most recent move to stabilize the situation in Somalia has developed with the creation of the Transitional Federal Government with Abdullahi Yussuf Ahmed as president and Dr Ali Ghedi as prime minister. This is the fourteenth attempt to establish a national government in Somalia since 1991. With the involvement and co-operation of most factions in Somalia, but not the Somaliland government, a concerted attempt has been made to organize the infrastructure of the country. While its success is yet to be proven, and it faces ongoing problems, there has been an attempt to re-establish the Central Bank of Somalia.

            In February 2005 Dr Mohamud Mohamed Uluso was appointed to the position of Governor of the Central Bank. However, this initiative proved unsatisfactory to the government and in September 2005 Dr. Uluso was dismissed from office. In a press release decrying the illegality of his dismissal, Dr. Uluso points to a difference of opinion in the matter of issuing currency as a reason for his dismissal. It appears that the Transitional Federal Government wanted to obtain new banknotes in a reasonably quick time, but Dr. Uluso believed that:

Under current circumstances, the Bank took the position to cautiously proceed and not promote printing new currency until the institutional capacity of the Bank is established. The Bank also limited the involvement of private businessmen in currency issuance process for its sensitivity, integrity and security and advocated for open competition. To eliminate recent public anxiety on the flood of fake and counterfeit currency in the country, it is absolutely necessary that the Leadership of Transitional Federal Government make public statement on its determination for preventing such event and taking concrete measures.

The cautions approach had not meant that the subject of currency had not been broached. Dr. Uluso had discussed new currency requirements with both De Le Rue and Giesecke & Devrient.

            With the Transitional Federal Government offering hope to many, the failure to get the reconstituted Central Bank of Somalia into successful operation is disappointing. It is quite possible that the new government will fail, especially given its poor performance in the first year of its existence. With the dismissal of the new Governor of the Central Bank, there is no indication that a new Governor has been appointed, nor of the expectation that new currency will be issued.

            Despite the apparent breakdown in previous attempts to govern the country and the tentative steps of the new government, the ‘water has found its level’ and commerce continues through local administrations, as do the basic services provided by many local authorities. As the country has survived for a number of years without a central bank and without the controls found in most countries, it will not be surprising to find that the region will continue to operate without the controls of a central bank or a stable currency for years to come, should the new government not succeed.

            Ultimately, one or more internationally recognized sovereign states will rise in the Horn of Africa. At this time a new currency (or currencies) will be issued and a new era will commence, allowing a new phase in the issue of banknotes in Somalia. In the meantime, more local issues of notes can be expected and, for collectors interested in Somali banknotes, the possibility of even more varieties of banknotes becomes a probability. Whatever the future holds, Somalia has already produced a rich variety of banknotes.

Bibliography

■          Abdurahman, Mohamed Dalmar Monetary and Exchange Rate Policies 1960-2001, The Experience of Somalia, Privately published by Mohamed Dalmar, 2003.

■          Crampton, William The World of Flags, Studio Editions, London, 1990.

■          Crapanzano, Guido Soldi D’Italia – Un secoldo di cartamoneta Fondazione Cassa di Risparmio di Parma, Parma, Italy 1995.

■          Crapanzano, Guido and Ermelindo Giulianini La Cartamoneta Italiana – Corpus Notarum Pecuniariarum Italiae Spiralli, Milan, Italy 2002.

■          Cuhaj, George (Editor) Standard Catalog of World Paper Money, Modern Issues 1961-Date (10^th Edition) Krause, Iola, United States of America, 2004.

■          Encyclopaedia Britannica 2003, Ultimate Reference DVD, ‘Maxamed Cabdulle Xasan, Sayyid’

■          Lewis, I. M. A Modern History of Somalia – Nation and State in the Horn of Africa Longman, London and New York, 1980.

■          National Bank of Somalia Somali National Bank, Report and Balance Sheet, Mogadisho, for years ending 1961 to 1969.

■          Rosenberger, Dr. Walter and Herbert C. Tobin (Editors) Keesing’s Contemporary Archives, Weekly Diary of World Events ‘British Somalia - Somalia’ page 17422, London, 1960.

■          Shafer, Neil and George Cuhaj (Editors) Standard Catalog of World Paper Money, General Issues (10^th Edition) Krause, Iola, United States of America, 2003.

■          Znamierowski, Alfred The World Encyclopedia of Flags, Hermes House, London, 2001.

Correspondence

■          Abdurahman, Mohamed Dalmar — Matters relating to the National Bank and Central Bank of Somalia and to their note issues.

■          Dubad, Abdirizak M.— Details concerning the notes issued by the Baanka Somaliland.

■          Hanewich, Murray — Matters relating to the East African Currency Board and various modern Somali note issues.

■          Nur, Ahmed M. — Information relating to the banknotes issued in Somalia.

Web Sites

■          www.banadir.com

■          www.somaliawatch.org

■          Somaliland Cyberspace (storm.prohosting.com/mbali/)

■          www.hiiraan.org

This article was completed in December 2005
© Peter Symes

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