Ali Ibrahim Jama had led the country’s central bank since 2018
The president of the Republic of Somaliland fired central bank governor Ali Ibrahim Jama as part of a wide-ranging cabinet reshuffle on September 2.
Muse Bihi Abdi announced that he was nominating Ali Abdullahi Dahir as the new governor. The lower house of Somaliland’s parliament confirmed Jama as governor in July 2018.
Bihi’s office gave no reason for the dismissals, beyond saying “the responsibility of the state is to rotate so that it can delegate to those who are fit to handle it”. He also replaced the government’s ministers for foreign affairs, mining, religious affairs, and energy, among other officials.
Somaliland’s constitution gives the president the power to dismiss senior officials, including the central bank governor, without consulting parliament. It states that a central bank governor can only take office after being confirmed by parliament.
On September 7, the central bank’s Facebook page showed former governor Jama giving Dahir a tour of the facilities. The president’s office described Dahir as a former head of the Technology Commission.
Somaliland effectively became independent from what was then the failing state of Somalia in 1991. In 1994, the region’s de facto government established the Bank of Somaliland or Baanka Somaliland.
The Somaliland parliament passed a central bank law in 2012, which established price stability as the bank’s primary mandate. The central bank says it “uses foreign exchange auction as the sole monetary policy instrument”, but plans to introduce reserve requirements.
According to the central bank’s website, it follows a “managed floating exchange rate regime”. However, the BBC reported in 2017 that the currency had devalued by approximately 50% in the previous few years. The report said this had made cash payments difficult and led to a rise in mobile payments.
A World Bank delegation met Bihi on September 8. The World Bank approved a $10 million program for the Somaliland civil service in 2016, which is due to end in December 2022. It has also partly financed other programs in Somaliland, including a $29 million private sector development fund run with the UK and Denmark’s development agencies.
The almost-state
Somaliland occupies a northern portion of the internationally recognized country of Somalia. Formerly a British colony, it became part of a united Somali state in 1960.
The region rebelled against the rule of Mohammed Siyad Barre in the 1980s. The Somali government responded with a campaign of repression that some aid workers said led to tens of thousands of civilian deaths.
The region declared its independence in 1991, amid the collapse of the government of Siyad Barre. The southern and central parts of Somalia have struggled, with limited success, to restore a central government since 1991.
No other state recognizes Somaliland diplomatically, but the region has maintained a stable government for three decades. Several foreign states maintain informal offices in Somaliland’s capital, Hargeisa. Kenya’s foreign ministry announced that it had appointed new personnel to its Hargeisa office on September 2, 2021.
According to Somaliland’s own statistics office, real GDP declined by 3.1% in 2020, and consumer price index inflation stood at 2.4% in May 2021.
