STEP 1: Quit the IMF, phase out foreign aid and burn all the Somali Shillings
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Self reliance and supply-side economics are the way forward, as has been proven by China and India quite recently, and the Monetarism pseudo-Keynesian economics of the IMF are toxic. Foreign aid does nothing for the economy and actually works against it, as most governments "providing" aid insist the goods have to be purchased in their country (so it helps their farmers out and isn't exactly altruistic, but rather a hidden subsidy). The Somali Shilling is a dead currency, and must be destroyed before any economic reforms can occur.
STEP 2: Sort out the currency
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Dahabshiil and the business community of Mogadishu and Bosaso should get together and create a Bank of Somalia, because the government is never going to do it, and establish a new currency, set an exchange rate of 20,000 old Somali shillings to 1 BoS banknote for a week (with priority given to the poor folks), and then notch it up to 50,000 old Somali shillings to 1 BoS banknote for the rest of the month, and then stop exchanging the currency at all.
Dahabshiil can start by only giving out BoS banknotes from remittances, and the traders in Mogadishu and Bosaso give only BoS banknotes on purchases and sales. Float it on the world currency market and investors could directly invest in the Somali economy by just purchasing Somali hard currency.
With good security on the banknotes, and control out of the grasping fingers of the corrupt politicians, Somalia could be the only country in Africa with a stable currency, which would be a gigantic boon to investment and business, and the government wouldn't have a "license to print money", so there would be a severe limit to how much damage they can do to the economy (see Zimbabwe, Puntland).
The Bank of Somalia would then store these foreign hard currencies from remittances and use them also to buy gold, as a solid backing for the BoS banknote, making the currency backed up by real money.
STEP 3: Create the Somali Oil and Minerals Corporation
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The Bank of Somalia and the Somali business community now creates the Somali Oil and Minerals Corporation, which is 75% funded by the Bank of Somalia from the hard foreign cash reserves from remittance money and the remaining 25% from private businessmen. The return on investment is more than was invested in the first place, and so it creates an investment feedback loop where the BoS recieves foreign hard currency earnings from mineral and oil sales worldwide to reinvest in more exploration and other industries in Somalia, ensuring the currency remains backed by hard currency and stable.
The huge oil and mineral profits for the Bank of Somalia are used to provide interest-free loans and even grants for small businesses and entrepreneurs throughout Somalia, as well as increasing the worth of the BoS banknote.
LATER STEPS:
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At this point, Somalia will have a solid enough foundation to open the country up to foreign investment, but only private corporations. The big international monetary bloodsuckers and governmental bodies can stay home.
