IMF Staff Completes Second Review under the Staff-Monitored Program for Somalia and Reaches Staff-Level Agreement on a New Three-Year Reform Program

IMF News, January 27, 2020

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Published: January 27, 2020

Mission, scope, and agreements

Press Release No. 20/18 — January 27, 2020.
An IMF team, led by Allison Holland, met with the Somali authorities in Addis Ababa, Ethiopia, from January 6—16, 2020.
The Somali authorities and the IMF mission team reached a staff-level agreement on the completion of the second review under the current Staff-Monitored Program (SMP-IV).
The IMF team and the Somali authorities reached a staff-level agreement on a preliminary policy package that could constitute the basis for a new three-year macroeconomic reform program to be supported by the Extended Credit Facility (ECF) and Extended Fund Facility (EFF).
The statement: “This preliminary agreement is subject to the approval of management and the IMF Executive Board and Somalia clearing its arrears to the IMF.”

Progress on reforms, legislation, and governance

The mission “commended the authorities on the success in enacting several critical bills, including on Revenue, Public Financial Management, and Anti-Corruption.”
The mission “welcomed the authorities’ ongoing efforts to deepen inter-governmental fiscal relations at both political and technical levels.”
The authorities’ continued strong commitment to policy and reform implementation “brings Somalia closer to qualification for debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.”
The mission noted continued efforts to “enhance governance and reduce the perception of corruption.”

Economic indicators and public finance

Domestic revenue collection through November reached US$194.6 million, relative to a full year target for 2019 of US$196 million.
The new program will support the authorities as they implement their Ninth National Development Plan (NDP9)—their strategy for inclusive growth and poverty reduction.

Key policy pillars of the proposed three-year program

The key policy pillars build on reforms achieved under successive SMPs and will include:
- further strengthening public financial management;
- continuing to increase domestic revenue mobilization;
- continued deepening of capacity at the Central Bank of Somalia;
- further efforts to enhance governance and reduce the perception of corruption.

Conditions, next steps, and objectives

The program is intended to guide Somalia’s reforms over the period between the HIPC Decision and Completion Points.
The preliminary staff-level agreement requires approval by IMF management and the IMF Executive Board and depends on Somalia clearing its arrears to the IMF.
Achieving the program and subsequent approvals represents a step towards reaching the HIPC Decision Point and eventually achieving debt relief under the HIPC Initiative.

Stakeholder engagement and meetings

During the visit, the team met with:
- Finance Minister Abdirahman Dualeh Beileh;
- Minister of Planning, Investment and Economic Development Gamal M Hassan;
- Central Bank Governor Abdirahman Mohamed Abdullahi;
- Ms. Hodan Mohamoud Osman, Secretary of the Senate Finance Committee;
- Mr. Mohamud Abdirahman Sheikh Farah, Chairman of the House of the People Commerce Committee;
- other senior officials.
The team also met with development partners and other stakeholders in Nairobi on January 17, 2020.

IMF Communications Department — End-of-Mission press release (views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board).