An International Monetary Fund (IMF) team, led by Ran Bi, has concluded discussions with Somali authorities, headed by H.E Bihi Egeh, resulting in a staff-level agreement on the fourth review of Somalia’s Extended Credit Facility (ECF) arrangement. The meetings took place from September 16 to October 8, 2025. This agreement is pending approval from the IMF Executive Board.
Ran Bi stated: “I am pleased to announce that the Somali authorities and the IMF team have reached a staff-level agreement on policies to complete the fourth review under the ECF arrangement approved in December 2023 for total access of SDR 75 million (about US$100 million) (Press Release No. 23/463). To mitigate the negative impact of foreign aid cuts and support their reform efforts, the authorities have requested an augmentation of access under the ECF arrangement of SDR 30 million (about US$40 million), to be disbursed in equal tranches at the conclusion of the 4th and the 5th ECF review, respectively. The agreement is subject to approval by the IMF’s Executive Board. Board approval would enable access to SDR 22.5 million (about US$30 million), bringing total disbursements under the arrangement to about US$100 million."
Somalia experienced strong economic growth of 4.1 percent in 2024; however, projections for 2025 and 2026 indicate slower growth rates at three percent and 3.3 percent respectively due to reduced foreign aid and adverse weather conditions. Inflation is forecasted to remain stable at around 3.5 percent, but food prices are expected to be higher.
The IMF notes that despite these challenges, Somali authorities continue efforts to boost domestic revenue and maintain fiscal discipline. Income tax collection has increased following a new law's implementation, keeping expenditures within program targets. The fiscal deficit for 2025 is estimated at 0.3 percent of GDP while plans for next year anticipate further improvements in revenue collection alongside additional security and election spending.
Structural reforms include modernizing customs procedures, enforcing tax laws more strictly, and strengthening public financial management as well as transparency measures in extractive industries.
The Central Bank of Somalia has also worked on enhancing its regulatory framework and preparing for currency reforms while making progress on anti-money laundering measures.
According to Ran Bi: “Continued assistance from multilateral and bilateral partners remains crucial to support the authorities’ policy efforts, especially in light of the high uncertainty and significant downside risks.”
Meetings involved officials from Somalia’s Ministry of Finance, Central Bank representatives, development partners, and private sector stakeholders.