Washington, DC(Mogadishu24)-The Executive Board of the International Monetary Fund (IMF) has completed the first review of the Extended Credit Facility (ECF) arrangement for Somalia, resulting in an immediate disbursement of SDR 7.5 million (approximately US$ 10 million). This disbursement, aimed at budget support, brings the total amount disbursed under the ECF for Somalia to SDR 37.5 million (about US$ 50 million).

Originally approved by the Executive Board on December 19, 2023, the ECF arrangement supports Somalia’s reform strategy following its completion point under the Heavily Indebted Poor Countries (HIPC) initiative. The program aims to strengthen key economic institutions and promote macroeconomic stability and growth, aligning with Somalia’s national development plan and the government’s long-term vision to maintain economic stability, enhance revenues and public financial management, promote financial deepening, improve governance, and enhance statistical capacity.

Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, commented on the Board’s decision:

“The Somali authorities have maintained strong reform momentum after reaching the completion point under the HIPC Initiative in December 2023. Somalia’s performance under the Fund-supported ECF arrangement has been commendable. Continued strong ownership of the reform agenda is crucial for building resilience, promoting inclusive growth, and reducing poverty. Support from development partners remains critical for the successful implementation of the reform strategy.”

Ms. Sayeh highlighted Somalia’s impressive revenue performance and the steadfast implementation of revenue-enhancing reforms, including customs modernization and the new income tax law. She emphasized the importance of further strengthening public financial management, including payroll integration, expenditure controls, and debt management capacity.

Commending ongoing reforms to strengthen the central bank’s institutional capacity, Ms. Sayeh noted the importance of formulating effective monetary and exchange rate policy frameworks in the context of the planned currency reform. She also stressed the need to continue promoting financial deepening, financial inclusion, and reforms to improve the AML/CFT framework and governance.

Finally, Ms. Sayeh underscored the significance of measures to bolster inclusive growth and strengthen resilience. She pointed out the authorities’ focus on building capacity in the petroleum sector, addressing food insecurity, building climate resilience, and enhancing trade integration as central to ensuring Somalia’s long-term development.

This review and subsequent disbursement reflect the IMF’s ongoing support for Somalia’s economic reform efforts and commitment to the country’s sustainable development.