efore I step down to the discussion of the topic, let me first define the word Inflation and then relate it to the current situation prevailing in Mogadishu .

Inflation refers to a general increase in prices or an increase in the prices of most goods and services. Inflation also means higher costs of doing businesses, which translates into a need to raise prices. The most popular measure of inflation is the consumer Price Index (CPI). The CPI measures the prices of consumer goods and services.

After knowing the definition, let me now relate it to this severe condition in Somalia . There is an argument going and many contra opinions to this difficult circumstance that has an adverse impact on the lives of many people in Somalia .

Many people related this problem (so called inflation) to the rise of the oil especially fuel in all over the world which has unfavorably forced and caused the rise of goods and services in price which in turn affected the lives of the people seriously.

Many others tie it to the large pool of money (printed  Somali Shilling) that resulted in the rise of dollar value and fall in the value of Somali Shilling. This is due to the instability (floating) and uncontrolled supply and demand of the Somali currency and exchange rate.

Others view this as some sort of embargo imposed by the Transitional Federal Government (TFG) with the support of some members of the international community for the main purpose of gaining the acceptance and support of the Somali community to the government.

Some others relate to the businessmen who always look after their individual interest rather than general interest. They act as central government and have a general oversight and control ofthe supply and demand of goods and services as well as the currency exchange.

They take decisions based on the exchange rate, price of goods and services, and the like regardless of the economic pattern, the income, and the purchasing power of society in general. These businessmen are just only concerned with profit maximization, but  do not act in a socially responsible manner.

Another reasonable outlook is due to the depletion of natural resources, shortage of rainfall and rural-urban migration that has reduced the production (farming, fishing, animal husbandry, etc) and eliminated benefiting from the factor of endowment that could take a crucial role in the development of the society as well as the economic productivity of the country as a whole.

To the conclusion of my topic, there is no a clear and generally agreed notion regarding to the severe economic condition existing in Somalia as this can either be assumed an inflation or other factors related (politics, businessmen, war and among others).

End