The Credibility of the Somali Central Bank: Independence, Transparency, and Accountability

Abstract

The very purpose of this study is to review the credibility of the Somali central bank: its independence, transparency, and accountability. The reason why, this study was conducted is that there was no previous study in its kind regarding the credibility of the central bank of Somalia by looking at its independence, transparency and accountability. The first objective of this study is to find out if central bank of Somalia is credible in terms of political, financial, and monetary policy independence. The second objective is to examine the types and degree of transparency and to settle ways to measure the transparency of the Somali central bank. The third objective is to find out if there are clear and well defined financial accountability structures in the central bank (CB) of Somalia. In this study, central bank independence (CBI), transparency, and accountability was measured to find out whether these elements can influence or possibly could have some positive effects on central bank credibility. The questionnaire used in this research is a self-administered dichotomous scale. Data was analyzed by using Statistical package for social sciences (SPSS) in descriptive statistics. The target population of this study was 32 respondents from the banking industry in Mogadishu. The result of this study became 55.78 mean averages with a Std. Dev. 5.235. The overall mean averages for a total of 30 questions became 1.859 and overall Std. Dev. 0.1745 which meant the result showed greater abnormality and data distribution positively skewed to the right. The central bank of Somalia has no independence.