Asian Journal of Public Administration and Law

The Somali shilling: Causes of public distrust and potential solutions

Dayah Abdi Kulmie, Abdirahman Abdinur Awale — Fri, 14 Mar 2025 00:00:00 -0500

A weak currency increases trade costs, causing inflation, reducing purchasing power, deterring foreign investment, and causing economic instability and financial uncertainty. A robust local currency strengthens national economic sovereignty. This paper examines the challenges facing the Somali Shilling and explores strategies for rebuilding public trust in the national currency, and analyzes the factors contributing to the currency's depreciation, such as excess currency circulation, limited financial oversight, and the widespread use of foreign currency. The paper reviews the existing literature and highlights that the collapse of Somalia's central government in 1991 destabilized the economy, causing currency devaluation, hyperinflation, and counterfeit activities. It also illustrates the effect of dollarization on the economy and its impact on the Somali Shilling. The paper states that modern money is backed by public trust, indicating that modern currency reflects government trust and citizen credibility. The study recommends restructuring the central bank, promoting economic stability, and addressing counterfeit currency issues. Central banks can strategically manage local currency to stimulate economic growth. Additionally, it emphasizes the importance of fostering trust in government institutions and implementing effective policies to enhance the currency's value and stability. By addressing these challenges, Somalia can strengthen its economy and reduce its reliance on foreign currencies.

Prevalence of fraud in private sector of Somalia: Case Mogadishu business firms

Mohamud Dahir Hilif — Mon, 17 Mar 2025 00:00:00 -0500

Fraud constitutes a significant challenge within the small business sector, often stemming from personal, group, or organizational incentives. Recent economic instability has likely exacerbated the occurrence of fraud among businesses. This study investigates the prevalence of fraud within the private sector of Mogadishu, Somalia, with the aim of identifying key risk factors and exploring potential mitigation strategies. The primary data was collected from 93 respondents using a questionnaire and analyzed using SPSS software. The majority of respondents, 75% men, aged 31-40, and educated, agreed that fraud is unethical and can damage an organization's reputation, with 67.8% expressing it as a major concern, while 93.3% agreeing it's unethical. Additionally, 88.8% believed fraud severely harms an organization's reputation. Further, factors contributing to fraud include personal and institutional pressures, improper management, unsuitable documentation, unclear responsibilities, and abuse of power. Fraud significantly impacts SMEs, affecting profitability, growth, and business credibility, emphasizing the need for improved accountability. The study recommends robust anti-fraud legislation, clear penalties, whistleblower protection, improved governance, and a regulatory body. It also emphasizes public awareness campaigns, internal controls, and improved management practices. Technology can help identify suspicious patterns and secure communication channels to protect sensitive information while fostering a culture of integrity and ethical behavior.