Trusting in Somalia’s stateless money: The persistence of the Somali shilling

Abstract

Abstract In 2016, the Federal Government of Somalia (FGS) announced plans to re-launch the Somali shilling (SoSh), which had its last official printing before the state collapsed in 1991. The article takes this pivotal moment to address the following three questions: (i) Why has the stateless SoSh persisted? (ii) Why is Somalia considering re-introducing an official currency at this point? (iii) What do Somalia’s monetary experiences tell us about relationships among ordinary citizens, elites, and the state in Africa? The article offers an explanation based on a theory of social trust to account for the persistence of the SoSh. Unlike other studies that mainly emphasize a risk aversion attribute to explain the reliance on the trusted and familiar under conditions of precarity, this approach shows how trust can be scaled to explain important macro-level phenomena, such as export trade and nationalism. It proposes that the Somalia story is relevant to other African cases where public trust, state sovereignty, and monetary systems are weak and contested. Finally, the paper concludes that a lack of trust in the FGS and its ability to ensure the value of a new SoSh means that many Somalis are better off with their fragmented currency system rather than a monetary experiment likely to further destabilize an already volatile environment.