TUNIS – Somalia is preparing to take a major step in modernizing its financial sector, as Central Bank Governor Abdirahman Mohamed Abdullahi announced readiness to join the Inclusive Instant Payments Initiative (IIPS), the Arab Monetary Fund’s (AMF) landmark program launched in June 2024.
Speaking in Tunis, Abdullahi stressed that Somalia’s participation will accelerate financial inclusion, reduce transaction costs, and open new opportunities for businesses and households.
“Instant payments are the backbone of modern economies. For Somalia, this is about ensuring our traders, entrepreneurs, and citizens have the same access to reliable, low-cost payment systems as others across the region,” Abdullahi said.
Somalia relies heavily on remittances, with millions of citizens depending on money sent home from the diaspora. By joining IIPS, the Central Bank aims to cut fees on cross-border transfers, ensuring families receive more of the funds intended for them. Analysts believe this could inject hundreds of millions of dollars directly into local communities each year.
The initiative is also expected to strengthen Somalia’s growing micro, small, and medium-sized enterprise (MSME) sector. Lower payment costs and real-time settlement could allow small businesses to trade more competitively, integrate into regional supply chains, and expand their customer base.
For cross-border commerce, IIPS promises to simplify trade payments with neighboring markets, reducing reliance on costly intermediaries. This is particularly significant for Somalia’s livestock, agricultural, and service exports, which are often constrained by delays and financial barriers.
The AMF has positioned IIPS as a tool for greater economic integration across the Arab world, but for Somalia, the program could represent a lifeline—linking its economy more firmly to regional partners and strengthening investor confidence.
“Somalia’s financial reforms are moving in the right direction. Joining IIPS will ensure our people and businesses are not left behind in the digital economy,” said the CBS Governor.