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Money in Mogadishu: Somali capital gets first cash machine

By Alex Court, for CNN, Somalia’s capital Mogadishu now has its first-ever ATM bank machine — and it dispenses U.S. dollars.

The machine was installed in late September in the upscaleJazeera Palace Hotel, which is located 300 meters from Aden Adde International Airport in the south-west of the city

Justus Mulinge Kisaulu, the hotel’s general manager, said that he had seen people using the new machine but it had not been widely adopted. “Most of the customers were not aware there is an ATM in Somalia,” Kisaulu explained. “Local residents, most of them don’t have a debit credit or a credit card to use the ATM.”

The U.S. dollar is “widely accepted” in Mogadishu and is used in local trading, according to the African Development Bank. The country’s official currency, the Somali shilling, has seen a sustained decline in value following decades of conflict in the war-torn nation.

Said Moallim Abukar, marketing manager of Salaam Somali Bank, which operates the ATM, said that other currencies would be available from the machine “in the near future.”

But Michael Walls, senior lecturer at theDevelopment Planning Unit at University College London, says that it’s unlikely the bank is aiming for local Somali people at this stage. “Diaspora Somalis will use it for sure,” he explains, referring to people of Somali origin who will probably have a bank account overseas. “It is likely to be a bit longer before locally based Somalis start using it.”

This is the first ATM in Somalia proper, but cash withdrawal machines already exist in the city of Hargeisa in the breakaway state of Somaliland, according to Salaam Somali Bank’s Abukar. Somaliland remains internationally unrecognized despite unilaterally declaring independence in 1991. According to local media outletSomalilandsun, ATM facilities were available in the city from March.

Somalia’s economic renaissance
Business opportunities in Somalia

More to come?

According to the Africa Research Institute, a British think-tank focused on sub-Saharan Africa, more than $1.2 billion is remitted to Somalia each year. This is more than half of Somalia’s gross national income, and also more than the total amount of international aid sent to the region.

While the recently-installed ATM could be seen as a sign of progress and stability, Walls says it is also an important development for remittance companies, who are also trying to adapt to mobile money transfers and cashless transactions. Indeed, he described the new ATM as presenting “some kind of challenge” to remittance companies.

However, Dahabshiil, a remittance company with 286 locations in Somalia, said they are “in the process of rolling out an ATM project” in Hargeisa and Mogadishu, but that these facilitates wouldn’t “replace the need for our traditional remittance services.”

While a great many obstacles still exist for Somalia, it is projects like this ATM that illustrate how business confidence is slowly returning to the war-ravaged city.

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