IMF Reaches a Staff-Level Agreement for the First Review of the Extended Credit Facility for Somalia
September 24, 2020
releases include statements of IMF staff teams that convey preliminary findings
after a visit to a country. The views expressed in this statement are those of
the IMF staff and do not necessarily represent the views of the IMF’s Executive
Board. Based on the preliminary findings of this mission, staff will prepare a
report that, subject to management approval, will be presented to the IMF’s
Executive Board for discussion and decision.
- The Somali authorities and the IMF mission team reached a staff-level agreement on the completion of the first review under the Extended Credit Facility.
- Flooding and swarms of desert locusts have aggravated the challenges of the COVID-19 pandemic for Somalia. Swift support from the international community is helping the authorities address the impact on the Somali people and the economy.
- Despite these challenges, the authorities have remained steadfast in their commitment to economic reforms, meeting all structural benchmarks for the first review and also making progress on the HIPC Floating Completion Point Triggers.
DC: A staff team from the
International Monetary Fund (IMF), led by Allison Holland, held discussions
with the Somali authorities during a virtual mission from September 12—22, 2020
on the first review of Somalia’s economic reform program being supported by an
Extended Credit Facility (ECF) arrangement.
the conclusion of the mission, Ms. Holland issued the following statement:
the first half of 2020, Somalia has been hit by multiple shocks—flooding,
desert locusts, and the global coronavirus pandemic. These have aggravated the
humanitarian challenges, and negatively impacted the economy and the
government’s ability to mobilize domestic revenues.
authorities have taken a number of measures to mitigate the impact of these
shocks on the Somali people and the economy. These efforts have been
underpinned by critical support from the international community and include
temporary tax relief on some basic food commodities; the introduction of a cash
transfer system for the most vulnerable, Baxnaano; and the launch of a credit
facility, Gargaara, for micro-, small-and-medium-sized enterprises.
the crisis, the authorities have sustained their strong commitment to economic
reforms and have made satisfactory progress in implementing key policies under
the Extended Credit Facility (ECF) program, supporting a staff-level agreement
on the completion of the first review. All structural benchmarks and indicative
targets for June were met, and all but one of the quantitative performance
criteria (QPC). Cumulative domestic revenues through June for the Federal
Government of Somalia (FGS) reached US$ 99 million against program target of
US$ 109 million. The authorities will request a waiver from the IMF Executive
Board for the missed QPC based on the measures planned to ensure domestic
revenues recover in 2021.
commended the authorities on their continued progress on fiscal reforms,
including in the areas of tax and customs administration, and ongoing efforts
to enhance intergovernmental fiscal relations and transparency. The mission
emphasized the importance of a formulating a 2021 budget consistent with the ECF-program
objectives and urged continued control on operating expenditures to create
fiscal space for spending on priorities identified in the authorities’ Ninth
National Development Plan (NDP9). The mission and the authorities agreed a new
structural benchmark that will underpin further improvements in general
government fiscal transparency and accountability.
mission welcomed the newly appointed senior management of the Central Bank of
Somalia and the progress being made on reorganizing the institution. It also
commended the authorities on further progress on AML/CFT issues, including the
ongoing work on the National Risk Assessment and efforts to build capacity at
the Financial Reporting Center. The mission urged the authorities to expedite
the licensing of the mobile money operators (MMOs) to advance the
implementation of the mobile money regulatory regime. A new structural
benchmark was agreed that will ensure greater transparency in the licensing of
MMOs and the issuance of the underlying telecommunications licenses.
congratulated the authorities on the approval by the Council of Ministers of
the National Anti-Corruption Strategy and its endorsement of the UN, African
Union, and Arab League conventions against corruption. It urged swift
Parliamentary ratification of these conventions to signal the country’s
commitment to improving governance and fight against corruption.
mission appreciated the active efforts the authorities are making to reach
agreement with their external creditors on debt relief consistent with the HIPC
framework and outlined in the HIPC Decision Point document for Somalia.
the visit, the team met with Finance Minister Abdirahman Dualeh Beileh;
Minister of Constitutional Affairs Salah Ahmed Jama; Minister of Justice Hassan
Hussein Haji; Minister of Petroleum and
Mineral Resources Abdirashid Mohamed Ahmed; Minister of Post,
Telecommunications and Technology Abdi Ashur Hassan; Central Bank Governor
Abdirahman Mohamed Abdullahi; Acting Director of the National Communications
Authority Abdullahi Abdiaziz Mohamed; and other senior officials. The IMF team
would like to thank the Somali authorities for their cooperation and the open
and productive discussions.”
IMF Communications Department
PRESS OFFICER: Nadya Saber
Phone: +1 202 623-7100Email: MEDIA@IMF.org