Editing Economy of Somalia (section)

==Finance==
{{main|Central Bank of Somalia|Somali shilling}}
[[File:Somalia (Somaliland)(023).jpg|thumb|right|A [[Dahabshiil]] bank branch in Hargeisa]]
The [[Central Bank of Somalia]] is the official [[Central bank|monetary authority]] of Somalia.<ref name="Cbsef">{{cite web|url=http://www.somalbanca.org/economy-and-finance.html|title=ECONOMY AND FINANCE|access-date=11 June 2015|archive-url=https://web.archive.org/web/20090124192809/http://somalbanca.org/economy-and-finance.html|archive-date=24 January 2009|url-status=dead}}</ref> In terms of financial management, it is in the process of assuming the task of both formulating and implementing [[monetary policy]].<ref name="Monpol">[http://www.somalbanca.org/monetary-policy.html Central Bank of Somalia - Monetary policy] {{webarchive|url=https://web.archive.org/web/20090125062011/http://somalbanca.org/monetary-policy.html |date=2009-01-25 }}</ref> In 2013 the [[African Development Bank]] assessed that the Somali Central Bank was "handicapped by the lack of adequate human, material and financial resources", but that it would be able to reduce the rate of inflation once it assumed control of monetary policy and issued a new currency. At this time Somaliland also had a central bank, though its main roles were to serve as a [[treasury]] to the government and print currency.<ref>{{cite web|author=African Development Bank Group|title=Somalia Country Brief 2013-2015|url=http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/2013-2015%20-%20Somalia%20-%20Country%20Brief.pdf|pages=3, IV|date=March 2013}}</ref>

Owing to a lack of confidence in the local currency, the [[United States dollar|US dollar]] is widely accepted as a medium of exchange alongside the [[Somali shilling]]. [[Dollarization]] notwithstanding, the large issuance of the Somali shilling has caused inflation. The central bank says it will end the inflationary environment when it assumes full control of monetary policy and replaces the presently circulating currency introduced by the private sector.<ref name="Monpol"/>

Somalia has had no central monetary authority for upwards of 15 years between the outbreak of the civil war in 1991 and the subsequent re-establishment of the Central Bank of Somalia in 2009. Bank-to-bank transfers are not possible, which led to the rise of private [[#Finance|money transfer operators]] (MTO) that have acted as informal banking networks.<ref name="Paysys">[http://www.somalbanca.org/payment-system.html Central Bank of Somalia - Payment system] {{webarchive|url=https://web.archive.org/web/20100627023453/http://somalbanca.org/payment-system.html |date=2010-06-27 }}</ref>

These remittance firms (''[[hawala]]s'') have become a large industry in Somalia, with an estimated US$1.6 billion annually remitted to the region by [[Somali people|Somalis]] in the diaspora via money transfer companies.<ref name=2009factbook>{{cite web|url=https://www.cia.gov/the-world-factbook/countries/somalia/|title=Somalia|access-date=2009-05-31|date=2009-05-14|work=[[World Factbook]]|publisher=[[Central Intelligence Agency]]}}</ref> The latter include Dahabshiil, Qaran Express, Mustaqbal, Amal Express, Kaah Express, Hodan Global, Olympic, Amana Express, Iftin Express and Tawakal Express. Most are credentialed members of the Somali Money Transfer Association (SOMTA), an umbrella organization that regulates the community's money transfer sector, or its predecessor, the Somali Financial Services Association (SFSA). Somalia is the world's fourth-most country dependent on remittances. Most remittances are sent by Somalis-based abroad to relatives in Somalia. This accounts for 20%-50% of the Somali economy.<ref name="UKSRS">{{cite web| url = http://www.diaspora-centre.org/DOCS/UK_Somali_Remittan.pdf| title = UK Somali Remittances Survey| access-date = 2010-06-24| archive-date = 2020-11-09| archive-url = https://web.archive.org/web/20201109191722/http://www.diaspora-centre.org/DOCS/UK_Somali_Remittan.pdf| url-status = dead}}</ref><ref name="Towhamrec">{{cite web|url=http://www.threcorder.co.uk/content/towerhamlets/recorder/news/story.aspx?brand=REConline&category=newsTowerHam&tBrand=northlondon24&tCategory=newstower&itemid=WeED13%20Apr%202010%2010%3A02%3A08%3A730 |title=Decades of community service recognised with award |publisher=Tower Hamlets Recorder |date=13 April 2007 |access-date=3 June 2010 |url-status=usurped |archive-url=https://web.archive.org/web/20110511205333/http://www.threcorder.co.uk/content/towerhamlets/recorder/news/story.aspx?brand=REConline&category=newsTowerHam&tBrand=northlondon24&tCategory=newstower&itemid=WeED13%20Apr%202010%2010%3A02%3A08%3A730 |archive-date=11 May 2011 }}</ref>
[[File:Somshil5r.jpg|thumb|left|A 500 [[Somali shilling]] banknote]]
[[Dahabshiil]] is the largest of the Somali money transfer operators (MTO), having captured most of the market vacated by [[Al-Barakaat]]. The firm has its headquarters in [[London]] and employs more than 2000 people across 144 countries, with 130 branches in the United Kingdom alone, a further 130 branches in Somalia, and 400 branches globally, including one in [[Dubai]]. The company provides a broad range of financial services to international organisations, as well as to both large and small businesses and private individuals.<ref name="UKSRS"/><ref name="Towhamrec"/><ref name="Forbes">{{cite web |url=http://www.forbescustom.com/EmergingMarketsPgs/AbdirashidDualeInterviewP1.html |title=Freeing Finance: If money makes the world go round, Dahabshiil CEO Abdirashid Duale makes sure it goes to the right people |publisher=Forbescustom.com |access-date=2010-06-27 |url-status=dead |archive-url=https://web.archive.org/web/20120106131406/http://www.forbescustom.com/EmergingMarketsPgs/AbdirashidDualeInterviewP1.html |archive-date=2012-01-06 }}</ref> After Dahabshiil, Qaran Express is the largest Somali-owned funds transfer company. The firm has its headquarters in both London and Dubai, with 175 agents worldwide, 66 agents in Somalia and 64 in London, and charges nothing for remitting [[Charitable organization|charity]] funds. Mustaqbal is the third most prominent Somali MTO, with 8 agents in Somalia and 49 in the UK. As with Dahabshiil and Qaran Express, it also has a notable presence internationally.<ref name="UKSRS"/>

As the reconstituted Central Bank of Somalia fully assumes its monetary policy responsibilities, some of the existing money transfer companies are expected in the near future to seek licenses so as to develop into full-fledged commercial banks. This will serve to expand the national payments system to include formal cheques, which in turn is expected to reinforce the efficacy of the use of monetary policy in domestic [[Macroeconomics|macroeconomic]] management.<ref name="Paysys"/>

With a significant improvement in local security, Somali expatriates began returning to the country for investment opportunities. Coupled with modest foreign investment, the inflow of funds have helped the Somali shilling increase considerably in value. By March 2014, the currency had appreciated by almost 60% against the U.S. dollar over the previous 12 months. The Somali shilling was the strongest among the 175 global currencies traded by [[Bloomberg L.P.|Bloomberg]], rising close to 50 percentage points higher than the next most robust global currency over the same period.<ref name="Tctotwbss">{{cite news|last=Derby|first=Ron|title=The curious tale of the world-beating Somali shilling|url=http://blogs.ft.com/beyond-brics/2014/03/20/the-curious-tale-of-the-world-beating-somali-shilling/#axzz2xAV0k3pX|access-date=27 March 2014|newspaper=Financial Times|date=26 March 2014}}</ref>