Somalia Currency Exchange Project (WB-P172057)

Countries
  • Somalia
Where the impacts of the investment may be experienced.
Financial Institutions
  • World Bank (WB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Bank Risk Rating
A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jun 25, 2020
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Ministry of Finance
The holder of the loan, grant, or other investment.
Sectors
  • Finance
  • Technical Cooperation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Advisory Services
The categories of the bank investment: loan, grant, etc.
Project Cost (USD)
$ 55.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ WB website

Updated in EWS Feb 3, 2020

Disclosed by Bank Jan 15, 2020


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Project Description

The Development Objective of the project is to support the issuance of a new, legal, low denomination national currency notes to replace the counterfeit and old notes currently in circulation.

The project has four components:

  1. Currency design and planning of implementation activities: The CBS will issue banknotes with low denominations and appropriate security features, namely SOS 1,000, SOS 2,000, SOS 5,000, and SOS 10,000. The CBS has already began to work on the design of the new currency and has completed the currency specifications including size, security features, and other specifications. The new series of banknotes will have much improved security features compared to the series from 1983–90 and will be difficult and time-consuming to copy by both traditional and computer-based printing methods. Typically, local counterfeiters do not exhibit sophisticated techniques and use crude in-house techniques. At this stage, the project will fund planning activities by the CBS, including development of a clear logistics and communication plan.
  2. Currency exchange implementation: Through this component the CBS will implement all currency exchange activities. Printing of banknotes will be procured internationally through a competitive tendering process. There are several specialized currency printing firms with facilities in the U.K., US, Germany, Switzerland and Russia that would be eligible to bid for this project. Delivery of the banknotes will be done by the vendor(s)8 via air or ship to Mogadishu, upon clearance by the CBS/Currency Management Unit. Transportation from the harbor/airport to this facility would be arranged with Somali security and AMISOM forces. In addition, the communication consultant hired under the project will execute all communication activities by coordinating with key stakeholders. The new banknotes will be distributed through MTBs and the process is expected to not to exceed 90-100 days.
  3. Ongoing technical assistance: Subject to securing adequate funding, the project will finance TA to the CBS to ensure sustainability of the project. The CBS organizational reform and governance (including having a wellfunctioning currency management unit) and stronger financial sector regulations (including mobile money operators) will be needed to ensure that new national currency can be managed appropriately and achieve the development objectives of ‘a sound and stable legal tender national currency’.
  4. Financial management, and monitoring and evaluation: This component would finance all the costs
    pertaining the Project Implementation Unit (PIU) within implementing entity; financial management, and monitoring
    and evaluation (M&E).
Investment Description
  • World Bank (WB)
Contact Information

World Bank:
Alwaleed Fareed Alatabani, Neema Mwingu
Lead Financial Sector Specialist

Borrower:
Ministry of Finance
Abdirahman Duale Beyle
Minister
mof@mof.gov.so

Implementing Agency:
Central Bank of Somalia
Abdirahman Mohamed Abdullahi
Governor
info@centralbank.gov.so

ACCOUNTABILITY MECHANISM OF WORLD BANK

The World Bank Inspection Panel is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by a World Bank-financed project. If you submit a complaint to the Inspection Panel, they may investigate to assess whether the World Bank is following its own policies and procedures for preventing harm to people or the environment. You can contact the Inspection Panel or submit a complaint by emailing ipanel@worldbank.org. You can learn more about the Inspection Panel and how to file a complaint at: http://ewebapps.worldbank.org/apps/ip/Pages/Home.aspx.