Via IMF (Den Internationale Valutafond)

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







November 18, 2020











  • Implementation of the Extended Credit Facility (ECF) supported program is off to a good start despite the challenges posed by COVID-19, flooding and the desert locust infestation.
  • The authorities’ swift response to the triple shock , supported by its partners and including tax relief on some basic commodities and expanding the social safety net, is helping mitigate the impact on people and the economy.
  • Sustained reform momentum will be essential for Somalia to reach the HIPC Completion Point.

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 million (about US$10 million), bringing Somalia’s
total disbursements under the arrangement to SDR 257.4 million (about
US$365.5 million).

Somalia’s ECF arrangement was originally approved by the Executive Board on
March 25, 2020 (see Press Release No. 20/105) for SDR 292.4 million (about
US$395.5 million or around 179 percent of Somalia’s quota). The ECF
arrangement aims to support the implementation of the authorities’ National
Development Plan and anchor reforms between the HIPC Decision and
Completion Points.

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

“Performance under the ECF-supported program has been broadly satisfactory,
despite the triple shock of COVID-19, flooding, and desert locusts that has hit
Somalia. The authorities have taken swift and appropriate actions, supported by the international
community, to mitigate the effects of these shocks, including the provision of temporary
tax relief on basic food commodities, expanding the social safety net, and providing credit to
micro-, small-and-medium-sized enterprises.

“The authorities remain steadfast in their commitment to the broader
policies and reforms of the program, which are critical to increase
inclusive growth and reduce poverty over the longer term. The
implementation of the proposed 2021 budget will underpin greater domestic
revenue mobilization and continued control on discretionary operating
expenditures, creating scope for spending on priorities identified in the
authorities’ Ninth National Development Plan (NDP9).

“The authorities’ plans to enhance fiscal transparency and accountability,
and recent steps to deepen intergovernmental fiscal relations, are welcome.
The commitment to improving governance and fighting corruption is also
encouraging, as are the planned steps to increase transparency and
accountability in the licensing framework for the telecommunications
sector. Advancing the licensing and regulation of mobile money operators is
urgent.

“Efforts to strengthen the organizational capacity of the central bank are
commendable. Continued capacity building across all stakeholders is needed
to improve AML/CFT compliance, and the national risk assessment should be
completed as quickly as possible.

“Sustained efforts to reach agreement with external creditors on debt
relief consistent with the HIPC framework, together with steps to
strengthen debt management capacity, are needed to safeguard debt
sustainability.

“Continued capacity building will be needed to support the successful
completion of the ECF-supported program and reach the HIPC completion
point. Support from Somalia’s partners for the Somalia Trust Fund will be
needed to ensure a continued smooth delivery of IMF technical assistance to
support the goals of the ECF-supported program and the HIPC Initiative.”


IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Nadya Saber

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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