Thursday July 10, 2025
Washington D.C. (HOL) — The Executive Board of the
International Monetary Fund (IMF) has completed the third review of Somalia’s
economic reform program under the Extended Credit Facility (ECF) arrangement,
unlocking an immediate disbursement of approximately US $10 million to support
the country’s ongoing economic reforms.
The disbursement, equivalent to SDR 7.5 million, brings
Somalia’s total receipts under the ECF arrangement to about US $70 million (SDR
52.5 million) since the program’s approval in December 2023. The funds will
provide essential budget support for Somalia as it works to strengthen its
economic institutions and maintain macroeconomic stability in line with its National
Transformation Plan and Centennial Vision 2060.
Despite maintaining a strong reform track record, Somalia
faces a challenging economic outlook. The IMF projects economic growth to slow
to 3% in 2025, down from an estimated 4% in 2024, citing disruptions in foreign
aid, adverse weather conditions, and heightened global uncertainty.
In a statement following the review, Nigel Clarke, IMF
Deputy Managing Director and Chair, praised Somalia’s reform progress despite
global and domestic headwinds.
“The Somali authorities have maintained reform momentum with
strong performance under their Fund-supported program. The newly launched
National Transformation Plan provides a welcome roadmap to build resilience,
promote inclusive growth, and reduce poverty,” Clarke said.
The IMF emphasized the need for Somalia to accelerate
domestic revenue mobilization, modernize its customs and tax systems, and strengthen
public financial management. Clarke highlighted the importance of implementing
the new Income Tax Law, rolling out the Pay and Grade reform, and establishing
a new pension regime for civil servants.
Additionally, Somalia was commended for progress in
enhancing the capacity of the Central Bank, promoting financial inclusion, and
taking steps toward reintroducing the Somali Shilling under a currency board
framework.
The IMF also recognized the adoption of a new legal
framework for the petroleum sector as a significant milestone, urging Somali
authorities to ensure transparent and accountable implementation to strengthen
governance and attract investment.
However, the Fund warned that continued donor support
remains essential to sustain reform momentum and prevent setbacks, particularly
as foreign aid uncertainties weigh heavily on both the economic and social
outlook.