Somalia’s economy has grown modestly in recent years, with an estimated growth of 3.1 percent in 2018 from 2.3 percent in 2017. To build on the growth as the country plans a new national currency, the parliament of the Federal Republic of Somalia has approved legislation allowing foreigners to serve as Somali Bank governors.
The vote came after information that the government had concluded on hiring a foreigner for the top central bank job, leaked. The parliament approved the amendment with 158 votes.
Reports say a Briton is the Somali government’s favourite for the job which Bashir Isse has held since April 2014. Isse previously held the position in interim roles from 2006 to 2010 and from November 2013.
Somalia’s new central bank governor will be tasked with ensuring the success of the country’s currency reform project and accelerate policy and reform implementation. The new governor will also be expected to help Somalia develop its money and capital markets which are not well organised, as well as regulating its vibrant mobile money market, as he steers the development of the banking and the financial system in the country.
Somalia has one of the most active mobile money markets in the world, with approximately 155 million transactions worth $2.7 billion per month. Today, more than 70 percent of adult Somalis use mobile money services regularly. The new governor will have to put policy in place to mitigate system vulnerabilities and avoid macroeconomic effects of service disruptions.
The new central bank governor is expected to complement the work of a government that has shown commitment to reforms.
According to Mohamad H. Elhage, who led an International Monetary Fund (IMF) staff team to meet Somali authorities in Kenya last year, “despite a difficult economic and political environment, the Federal Government of Somalia has successfully completed two consecutive 12-month Staff-Monitored Programs (SMPs) since May 2016, and on June 20 this year , the Managing Director of the IMF approved a third 12-month SMP (SMP III) covering May 2018–April 2019.
“This third SMP will continue to lay the foundation so that Somalia obtains debt relief under the Heavily Indebted Poor Country (HIPC) Initiative as soon as feasible once established benchmarks are met,” Elhage added.