Somalia, IMF Forge New Agreement to Boost Financial System and Economic Recovery

The Federal Government of Somalia and the International Monetary Fund (IMF) have concluded a comprehensive 36-month staff-level program, focused on fortifying Somalia’s financial infrastructure and fostering economic rejuvenation.

In this accord, the IMF emphasizes strategic objectives, including the preservation of macroeconomic stability, augmentation of revenue generation, bolstering public financial management, strengthening oversight and regulation within the financial sector, encouraging financial inclusivity and accessibility to credit, and propelling structural reforms to enhance governance and transparency.

Mr. Bihi Iman Egeh, the Minister of Finance of the Federal Government of Somalia, expressed his enthusiasm for this pivotal agreement. He highlighted its pivotal role in sustaining financial rehabilitation initiatives post the debt relief program. For the first time in over three decades, the minister said, Somalia will directly engage with international financial institutions, enabling access to concessional financing and grants to bolster the nation’s developmental initiatives.

Following Somalia’s successful ninth and final review under the Extended Credit Facility (ECF) arrangement, as reported by the federal government. The country is poised to attain the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative by December 2023.

This signifies the culmination of a protracted journey toward debt relief, liberating Somalia from the burden of an unsustainable external debt, which has plagued the nation since the collapse of its central government in 1991, amounting to approximately $5.3 billion.