Press Release No. 24/191

IMF Executive Board Concludes the First Review of the Extended Credit Facility for Somalia

May 29, 2024

• The IMF Executive Board completed the first review under Somalia’s Extended Credit Facility (ECF) arrangement. The decision allows for an immediate disbursement of about US$10 million to Somalia to support its economic policies and reforms.
• Real GDP growth is expected to rise to 3.7 percent in 2024 compared to 2.8 percent in 2023, supported by continued recovery in agriculture, greater remittances, and higher investment.
• Somalia has continued to advance its reform agenda and program performance has been strong. Policy priorities are to maintain fiscal sustainability, strengthen revenues and public financial management, promote financial deepening, improve governance, and enhance statistics.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) today completed the first review of the Extended Credit Facility (ECF) arrangement for Somalia. The Board’s decision enables the immediate disbursement of SDR 7.5 million (about US$ 10 million), which will be channeled for budget support, bringing Somalia’s total disbursement under the Extended Credit Facility (ECF) to SDR 37.5 million (about US$ 50 million).

Somalia’s ECF arrangement was originally approved by the Executive Board on December 19, 2023 (see Press Release No. 23/463 ). 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. 

Following the Executive Board discussion, Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, made the following statement:

“The Somali authorities have maintained 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. 

“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.

“Measures to bolster inclusive growth and strengthen resilience are important. 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.”