Efforts to “launder” money

The value of the Somali shilling in Mogadishu has continued to fall since the beginning of the year, with a sharp increase in food prices. A local economist told IRIN that the continuing devaluation of the Somali shilling had an overall “disastrous impact on the already impoverished population” of Mogadishu. Prices of all imported food items have increased sharply, with sugar from Somali shillings 3,500 per kg in December to Somali shillings 6,000 - an increase of more than 70 percent. However, the economist told IRIN that the construction sector was “booming”. He said the new investment in buildings was partly attributable to people “laundering” the newly issued Somali shillings flown into Mogadishu this year. In the south of the city, the daily wage of an ordinary construction worker has increased from Somali shillings 15,000 to between 40,000 to 50,000. Prices of local construction materials have dramatically increased, local sources said, with a bag of cement almost twice the price it was in February. There is also a nervousness that the government may print new currency to replace the old shillings, and people are looking for “safe” projects to invest in, said the economist. Moreover, availability of foreign exchange in Mogadishu has become limited, local sources said.