"We have been negotiating with the pirates indirectly through the elders," President Hassan Sheikh Mohamud told AFP. "Piracy has to end."
Mohamud, elected by lawmakers six months ago, said that he wanted to offer an "alternative means of earning a living" to young Somalis who have taken up the gun to join pirate gangs in the Horn of Africa country.
However, Mohamud said that the amnesty was not open to pirate kingpins – those who take the vast majority of the profits from the attacks – some of whom are wanted by Interpol.
"We are not giving them amnesty, the amnesty is for the boys," he said, speaking on Wednesday in an interview at Villa Somalia, the Italian colonial art-deco palace in war-ravaged capital Mogadishu.
Somalia has been battered by conflict since 1991 but a new UN-backed government took power in September, ending eight years of transitional rule by a corruption-riddled administration.
Large parts of the country have been carved up by rival militias who have developed autonomous regions that pay little, if any, heed to the weak central government.
Many of the most notorious pirates, who launched attacks far across the Indian Ocean earning millions of dollars in international ransoms, are based along the northern coastline of the semi-autonomous Puntland region.
The amnesty comes amid a sharp drop in the number of pirate attacks in Somalia, which are at a three-year low, thanks to beefed up naval patrols and teams of armed security guards aboard ships in the Gulf of Aden and the Indian Ocean.
However, while the pirates have lost ground, the International Maritime Bureau (IMB) still warns that Somalia's waters remain extremely high-risk.
Seven boats and 113 hostages are still held by Somali pirates, according to the IMB, while some pirates have turned to land-based kidnapping and banditry instead.
But piracy is only one of many challenges Mohamud faces in seeking to rebuild his devastated nation, with al-Qaeda linked Shabab insurgents vowing to topple his government.
He plays down an assassination attempt made just two days after his election, noting that "millions of Somalis" died during the country's two-decade civil war.
"There is a time when this [life] has to end," said Mohamud.
The former professor, who set up Somalia's first private university during the civil war, wants to build up a new state to replace the current one wrecked by war.
"This is still a failed state and we have to put the foundations in place," he told AFP, adding that when he came to power he found that the "state was bankrupt, there was no money left at the treasury."
'Very, very limited capacities'
Mohamud, taking over from predecessor Sheikh Sharif Sheikh Ahmed, whose government was widely condemned for rampant corruption, said that when he came into office, some security forces had not been paid for five months.
"They were close to coming onto the streets and looting, their officers told me," he said.
In a nation ranked as one of the world's most corrupt, Mohamud recounts how shortly after his surprise election a group of businessmen offered him $200 000 to spend as he wished.
"I asked them if they would have a problem putting this money into the central bank," he said. "This gesture was very, very important."
That action was so talked about that other businessmen followed suit and more than a million dollars were donated into the central bank, he said, taking visible pride in "this very, very important decision".
In stark contrast, any mention of the widely condemned sentencing to a year in prison of a woman who alleged security forces had raped her, as well as the jailing of a journalist who interviewed her, puts him ill at ease.
"It hurts me a lot when I hear that a Somali woman has been raped," he said, pointing out that he has "fought and advocated for women's rights."
While refusing to criticise the court's decision to sentence the woman, he said somewhat apologetically he was "running a state with very, very limited capacities".
Sitting next to the national flag – a white star on a blue background – he said he wanted to build a real state, even if the vast majority of the country is controlled by militia forces or Islamist fighters.
Areas under government control were wrested off Al-Shebab extremists by a 17 000-strong African Union force, which fights alongside Somali troops and other pro-government militia forces.
"For the first time, this is a government that wants to bring back together Somalia's fragmented society," he said, appealing for international aid to be coordinated with the government.
Mohamud, who says he has never fired a rifle in a country awash with weapons, has also asked for the lifting of an international embargo on arms sales to his government.
"We cannot build capable security forces unless the arms embargo is lifted," he argued.
On Wednesday United Nations officials said the Security Council is set to ease the two decade-old arms embargo against Somalia.
The measure is likely to be part of a council resolution renewing the mandate of the AU force, which should be passed on Wednesday next week. – AFP