IMF urges ‘strong international support’ to expedite Somalia’s debt process

The IMF has called for ‘strong support’ from the international community to fast track Somalia’s realization of debt relief thresholds noting the country had made significant progress towards meeting the requisite conditions for debt relief.

Following a meeting with Somali officials led by Finance Minister Abdirahman Beyle last week in Addis Ababa, the IMF staff noted there was need for concerted efforts from the international community to prop Somalia’s efforts in meeting the debt relief thresholds.

“To fulfill the authorities’ goal of reaching the HIPC DP as soon as possible, strong support from the international community will be critical to secure the financing needed to clear Somalia’s arrears to the international financial institutions (IFIs) and debt relief,” a statement from the global lender read in part.

The statement follows the review of the 4th Staff Monitored Programme (SMPIV) which runs from May 2019-July 2020.

The 4th SMP which is part of the ongoing agreement between Somalia and IMF to allow the lender to monitor the implementation of the authorities’ economic program focuses on revenue mobilization, financial sector stability and compliance with anti-money laundering and terror financing.

The IMF lauded Somalia’s commitment to realizing debt relief citing robust revenue mobilization, new mobile regulations and agreements between the Federal Government and Federal Member States on securing debt relief ‘despite broader political differences’.

The lender however warned inflation will temporarily increase to 4% due to higher food prices as a result of poor rainfall earlier in the year.

Key risks to the outlook continue to reflect the difficult security situation and vulnerability to climate shocks, the statement noted.

Economic growth is projected to remain broadly stable at 2.9 percent in 2019.