Somali Magazine – Following the successful completion of debt relief, the Federal Government of Somalia and the International Monetary Fund (IMF) have achieved an agreement on a 36-month staff-level programme aimed at improving the country’s financial system and boosting economic recovery.
The accord was disclosed in an IMF report released on November 1, 2023, which applauded the Somali government’ progress in implementing financial reforms and boosting governance.
Somalia had successfully completed the ninth and final review under the Extended Credit Facility (ECF) arrangement, paving the path for Somalia to attain the Heavily Indebted Poor Countries (HIPC) Initiative completion point in December 2023.
The completion milestone will signal the end of a lengthy debt-relief process for Somalia, which has been burdened by an unsustainable external debt of approximately $5.3 billion since the breakdown of the central government in 1991.
The new ECF programme, which will begin after the completion point, aims to guide policies for the post-debt relief period, strengthen financial institutions, support small businesses, and foster inclusive economic growth in accordance with the National Development Plan and the Somali government’s long-term vision.
The new programme, according to the IMF, will focus on maintaining macroeconomic stability, improving revenue mobilisation and public financial management, improving financial sector supervision and regulation, promoting financial inclusion and credit access, and advancing structural reforms to improve governance and transparency.
The IMF also stated that ongoing international partner support is critical for Somalia to accomplish its development goals and overcome difficulties such as the COVID-19 pandemic, climate shocks, insecurity, and humanitarian crises.
Mr. Bihi Iman Egeh, Minister of Finance of the Federal Government of Somalia, praised the new agreement and stated that it will ease the continuation of financial rehabilitation efforts after the debt reduction programme ends.
He stated that Somalia will be working with foreign financial institutions for the first time in more than 30 years, and will have access to concessional loans and grants to promote its economic objectives.
He also expressed gratitude to the IMF and other partners for their consistent support and cooperation with Somalia during the debt-reduction process.