Tuesday August 6, 2024
FILE - Puntland President Said Abdullahi Deni speaks at a press conference in Garowe, defending the 2021 decision to abandon the Somali shilling in favor of the U.S. dollar to prevent economic instability and poverty.
Garowe (HOL) — Puntland President Said Abdullahi Deni has defended the 2021 decision to stop using the Somali shilling, asserting that the shift to the U.S. dollar saved the region from economic instability and widespread poverty. "We have $7 million worth of Somali shillings stored with no way to use them. There's no central government to exchange it for other currencies. If we hadn't taken this step, our people would be impoverished today," Deni stated.
The decision comes amid significant political and economic tensions between Puntland and the Somali Federal Government. In March 2024, Puntland withdrew its recognition of the Federal Government following constitutional amendments it claimed breached the federal pact and favoured specific interests. These amendments included direct presidential elections and increased presidential powers, which Puntland argued could destabilize the federal arrangement and undermine regional autonomy.
The strained relationship has affected security and development initiatives. Puntland's Ministry of Information recently denied federal reports that Somali army forces and international partners killed 20 al-Shabab militants in the region, asserting its capability to manage its own security. Additionally, development projects such as the Barwaaqo and Somalia Food Systems Resilience Project (SFSRP), focusing on water management and food system resilience, have resumed after being halted due to political disputes.
Tensions have also affected educational resources. Somalia's Minister of Education, Farah Sheikh Abdulkadir, urged Puntland lawmakers to accept federal educational resources. The federal government has been accused of politically blocking educational projects worth $16 million intended for Puntland. Abdulkadir emphasized that educational matters should not be entangled with political disputes and that Puntland's education system should be on par with the rest of the country.
Puntland operated independently since its March declaration and vows to do so until a more inclusive and representative constitutional framework is established. Deni added, "I am pleased that this decision has safeguarded the wealth of our poorest citizens. Some people outside Puntland had set up machines to print counterfeit money. They brought this fake currency into the market and exchanged it for dollars. We took seven million dollars, but we controlled 100 million dollars that would have been similarly stolen if we had continued using the Somali shilling."