Hiiraan Online

Although Somalia has been an IMF member since 1962, relations broke off after the civil war of the early 1990s which left the country with "no government with which the Fund could deal."

In an official statement, Shirdon called the IMF's decision on Friday "a major milestone in the country's long road to economic recovery."

It was the latest in "a series of developments supporting the government's policy of strengthening relations with its international partners," he added.

"The truth is that we are rejoining the community of nations and we must continue to demonstrate, both to Somalis and the world, that we justify this newfound confidence. There is much hard work ahead of us," Shirdon said.

Somali president Hassan Sheikh Mohamud is currently in Turkey for talks with semi-autonomous region Somaliland.

The IMF said its decision was "consistent with broad international support and recognition of the Federal Government."

Mohamud's new government, which took office in September 2012, "has since enjoyed considerable support, including from the United Nations, the African Union, the European Union, the Organization of Islamic Cooperation, and many IMF member countries," the IMF said.

Somalia, however, still owes some $352 million to the Fund, and so is currently ineligible for any new financing.

The country has been enmeshed in civil conflict and chronic fighting between warlords since the fall of dictator Mohamed Siad Barre in 1991.

A transitional government, backed by an African force, is starting to establish itself after major victories against the Shebab, a violent Islamist group with links to Al Qaeda.

Shebab are considered to be on the back foot, having lost a string of key towns in recent months to African Union forces, Somali troops and Ethiopian soldiers.

The UN Security Council last month suspended the arms embargo against Somalia for a year, easing the oldest international weapons blockade to help the government take on Islamist militants.