Thursday 30 May 2024 {HMC} The Executive Board of the International Monetary Fund (IMF) has agreed to an immediate disbursement of US$10 million to Somalia for budget support, bringing Somalia’s total disbursement under the Extended Credit Facility (ECF) to US$50 million.
The Board completed the first review of the ECF arrangement for Somalia on Wednesday.
The Deputy Managing Director and Acting Chair, Ms. Antoinette Sayeh, commended the Somali authorities for maintaining strong reform momentum after reaching the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative in December 2023.
“Somalia’s performance under the Fund-supported Extended Credit Facility Arrangement has been strong. The authorities’ continued strong ownership of the reform agenda will be important to build resilience, promote inclusive growth, and reduce poverty.
Continued and timely support from development partners is also critical for the successful implementation of the reform strategy,” she said.
“The authorities’ strong revenue performance and steadfast implementation of revenue-enhancing reforms are welcome.
Sustained efforts on domestic revenue mobilization would help to make room for priority spending. Key reforms include customs modernization and the new income tax law.
Further strengthening of public financial management is also important, including continued progress on payroll integration, enhancing expenditure controls, as well as developing debt management capacity.
“Ongoing reforms to strengthen central bank institutional capacity are commendable. Careful formulation of the monetary and exchange rate policy frameworks is important in the context of the planned currency reform.
Efforts should continue to promote financial deepening and financial inclusion and to advance reforms to improve the AML/CFT framework and governance,” she added.
Ms. Antoinette Sayeh emphasized that the authorities are focused on building capacity in the petroleum sector and implementing its legal framework.
Addressing food insecurity, building climate resilience, and enhancing trade integration are central to ensuring Somalia’s long-term development.
Somalia’s ECF arrangement was originally approved by the Executive Board on December 19, 2023.
The program supports the authorities’ reform strategy, after achieving the completion point under the Heavily Indebted Poor Countries (HIPC) initiative, to further strengthen key economic institutions and promote macroeconomic stability and growth.
This is in line with Somalia’s national development plan and the government’s long-term vision to maintain economic stability, strengthen revenues and public financial management, promote financial deepening, improve governance, and enhance statistics.
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