Somali Magazine – The International Monetary Fund (IMF) has granted Somalia relief and an additional $100 million in financing under a three-year Extended Credit Facility (ECF) arrangement.
This new credit facility is expected to help the country to boost economic reforms.
Ms Laura Jaramillo in a press statement issued last week pointed out, “Somalia has maintained strong implementation of wide-ranging reforms to help strengthen key economic and financial policy institutions. This progress is paving the way for Somalia to reach the Heavily Indebted Poor Countries (HIPC) Completion Point in December 2023 at which point Somalia is expected to receive debt relief and move towards fully normalizing relations with its key creditors.”
The global lender’s valuation of Somalia comes after a month-long tour of several African states including the Democratic Republic of Congo (DRC), Rwanda, Senegal, Mozambique, Gambia, Comoro, and Zimbabwe, where the team held discussions with authorities on key economic, financial, social and governances reform programmes critical in unlocking millions of dollars towards budgetary support and strengthening of international reserves.
The IMF team also revealed that despite the progress achieved Somalia still faces significant challenges ahead including those stemming from economic, social, security, and climate risks.
Last year (2022) an estimated 54 percent of the Somalia’s population was living on less than $2.06 per day.
The country is highly vulnerable to climate shocks that hurt growth and hinder poverty reduction efforts.
As a result, Somalia authorities have requested a new 3-year IMF-supported program under the ECF to help the country further strengthen key economic institutions and promote macroeconomic stability and growth.
According to IMF Somalia’s post-HIPC policy priorities will be to maintain fiscal sustainability, increase domestic revenues and strengthen public financial management, promote financial deepening and financial inclusion, improve business environment and governance and enhance statistics.
The ECF-supported program aims to strengthen economic recovery, tackle inflation, address debt vulnerabilities, advance structural reforms and foster strong and inclusive growth.