The International Monetary Fund (IMF) is an international organization, headquartered in Washington, D.C., consisting of 189 countries

By Gary Raynaldo     DIPLOMATIC  TIMES

The Somali authorities and the International Monetary Fund (IMF)  mission team reached a staff-level agreement this week on the completion of the first review under the Extended Credit Facility.  In March, the IMF said its Executive Board approved a new three-year $395 million financing arrangement for Somalia under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF).  A staff team from the IMF,  led by Allison Holland, held discussions with the Somali authorities during a virtual mission from September 12—22, 2020 on the first review of Somalia’s economic reform program being supported by an  ECF arrangement.  The IMF and the World Bank announced in March that Somalia had taken the necessary steps to begin receiving debt relief, a crucial move that will allow the Horn of Africa country to lower its $5.2 billion in external debt to around $557 million.  Somalia is grappling with the coronavirus outbreak, a recent desert locust swarm and is gearing up for elections later this year.   Holland said in a statement on September 24 that during the the first half of 2020, Somalia has been hit by multiple shocks—flooding, desert locusts, and the global coronavirus pandemic.  Allison said these have aggravated the humanitarian challenges, and negatively impacted the economy and the government’s ability to mobilize domestic revenues.

“The authorities have taken a number of measures to mitigate the impact of these shocks on the Somali people and the economy. Despite the crisis, the authorities have sustained their strong commitment to economic reforms and have made satisfactory progress in implementing key policies under the ECF program, supporting a staff-level agreement on the completion of the first review. All structural benchmarks and indicative targets for June were met, and all  but one of the quantitative performance criteria (QPC). Cumulative domestic revenues through June for the Federal Government of Somalia (FGS) reached US$ 99 million against program target of US$ 109 million.  The mission welcomed the newly appointed senior management of the Central Bank of Somalia and the progress being made on reorganizing the institution.”

-IMF Staff Team Leader  Allison Holland

IMF Endorses SOMALIA  National Anti-Corruption Strategy

Holland also stated that IMF staff congratulated the authorities on the approval by the Council of Ministers of the National Anti-Corruption Strategy and its endorsement of the UN, African Union, and Arab League conventions against corruption. It urged swift Parliamentary ratification of these conventions to signal the country’s commitment to improving governance and fight against corruption.

Holland said during the visit, the IMF team met with Finance Minister Abdirahman Dualeh Beileh; Minister of Constitutional Affairs Salah Ahmed Jama; Minister of Justice Hassan Hussein Haji; Minister of Petroleum and Mineral Resources Abdirashid Mohamed Ahmed; Minister of Post, Telecommunications and Technology Abdi Ashur Hassan; Central Bank Governor Abdirahman Mohamed Abdullahi; Acting Director of the National Communications Authority Abdullahi Abdiaziz Mohamed, and other officials. 

“As Somalia continues on its path towards stability and development after 30 years outside the international financial system, the immediate normalization of its relations with the international community will re-open access to critical additional financial resources to strengthen the economy, help improve social conditions, raise millions out of poverty, and generate sustainable employment for Somalis,”  the IMF said. 

Somalia has taken the necessary steps to begin receiving debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Somalia is the 37^th country to reach this milestone, known as the HIPC Decision Point. – IMF