The International Monetary Fund (IMF) Executive Board has completed the third review of Somalia's economic reform program under the Extended Credit Facility (ECF). This decision allows for an immediate disbursement of SDR 7.5 million, equivalent to approximately US$ 10 million, aimed at budget support. This brings the total disbursement under the ECF for Somalia to SDR 52.5 million, or about US$ 70 million.
Somalia's ECF arrangement was initially approved by the IMF Executive Board on December 19, 2023. The program aligns with Somalia’s National Transformation Plan and Centennial Vision 2060, supporting post-HIPC reform strategies to strengthen economic institutions and promote macroeconomic stability and growth.
Deputy Managing Director and Chair, Mr. Nigel Clarke, commented on the progress: "The Somali authorities have maintained reform momentum with strong performance under their Fund-supported program despite significant global and domestic challenges." He noted that while the new National Transformation Plan provides a medium-term agenda for resilience and inclusive growth, foreign aid cuts pose risks to Somalia’s economic outlook. Clarke emphasized the need for strengthening domestic revenue mobilization to support social and development spending.
Clarke praised Somalia's strong revenue performance and reforms in customs modernization, income tax law implementation, and revenue administration enhancement. He highlighted the importance of strengthening public financial management and debt management through initiatives like Pay and Grade reform and a new pension regime for civil servants.
Progress in improving the central bank’s institutional framework was acknowledged as commendable. Clarke recommended continued efforts in promoting financial inclusion and enhancing the AML/CFT framework. The authorities are encouraged to reintroduce the Somali Shilling carefully and adopt a currency board arrangement.
Additionally, Clarke noted that adopting a comprehensive legal framework for governance in the petroleum sector is crucial for accountability and transparency. Further reforms are suggested to improve governance and combat corruption.