IMF Management Complete the First Review Under the Staff-Monitored Program with Somalia
IMF News, November 18, 2019
Source details
- Canonical URL
- IMF Management Complete the First Review Under the Staff-Monitored Program with Somalia
Other formats
Bibliographic details
- Published: November 18, 2019
Review outcome and program status
- On September 23, 2019, the Management of the IMF completed the first review under the fourth Staff-Monitored Program (SMP IV) with Somalia, which covers the period May 2019–July 2020.
- IMF staff commends the authorities for implementing key reforms and for satisfactory performance under the fourth Staff-Monitored Program (SMP).
- Sustaining the stated commitment of the Finance Ministers of all the Federal Member States (FMS) to the goals of the program is critical to mitigating program implementation risks.
- The IMF supports Somalia’s efforts to secure debt relief and is working with its members to secure the financial resources necessary to cover the IMF’s costs of debt relief.
- Note on SMPs: An SMP is an agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic program. SMPs do not entail endorsement by the IMF Executive Board. The SMP is supported by quantitative performance measures, indicative targets and structural measures.
Economic outlook and risks
- Underlying economic growth remains stable, supported by donor support and the ambitious and broad reform agenda.
- Key risks: insecurity and recurring drought.
- Despite progress, growth is insufficient to substantially reduce poverty.
Fiscal performance and public financial management
- Domestic revenue mobilization reached $126 million in the year to July 2019, exceeding the indicative target of $111 committed to in the program.
- Continued progress on public financial management, including to strengthen expenditure controls and pass the updated Public Financial Management Law, will be key to continuing to improve governance and donor confidence.
- Fiscal policy framework continues to strengthen.
Financial sector reforms and central bank capacity
- Financial stability reforms are deepening.
- New mobile money regulations are in place; implementation will be key for supporting financial stability.
- Continued efforts to expand the operational and organizational capacity of the Central Bank of Somalia will underpin further development of the financial sector more broadly.
Debt relief, HIPC, and international support
- Reducing Somalia’s debt to sustainable levels under the Heavily Indebted Poor Countries (HIPC) Initiative and normalizing relations with international financial institutions will unlock access to additional financial resources to address Somalia’s development needs.
- Achieving HIPC Decision Point in a timely manner requires:
- A concerted effort by the authorities and the international community.
- Developing the necessary track-record in the context of SMP IV.
- Completion of the authorities’ ninth National Development Plan, which will form Somalia’s interim poverty reduction strategy (work on this is complete).
- Securing sufficient financing commitments for arrears clearance and debt relief.
- The IMF fully supports this goal and is working with its membership to secure the necessary financial resources to cover the IMF’s costs of debt relief.
Selected economic and financial indicators (highlights from Table 1)
- Nominal GDP in millions of U.S. dollars:
- 2015: 4,049
- 2016: 4,198
- 2017: 4,509
- 2018: 4,721
- 2019 (Proj.): 4,958
- 2020 (Proj.): 5,218
- 2021 (Proj.): 5,507
- 2022 (Proj.): 5,816
- Real GDP, annual percentage change (selected years):
- 2015: 3.5
- 2016: 2.9
- 2017: 1.4
- 2018: 2.8
- 2019 (Proj.): 3.2
- Per capita GDP in U.S. dollars:
- 2015: 310
- 2016: 313
- 2017: 327
- 2018: 332
- 2019 (Proj.): 339
- 2020 (Proj.): 347
- 2021 (Proj.): 357
- 2022 (Proj.): 368
- Consumer prices (e.o.p., percent change):
- 2015: 0.3
- 2016: 1.2
- 2017: 6.1
- 2018: 4.0
- 2019 (Proj.): 3.0
- 2020 (Proj.): 2.5
- 2021 (Proj.): 2.2
- Central government finances (percent of GDP, selected lines):
- Revenue and grants:
- 2015: 4.1
- 2016: 6.0
- 2017: 5.7
- 2018: 6.9
- 2019 (Proj.): 7.2
- 2020 (Proj.): 7.4
- 2021 (Proj.): 7.7
- Grants:
- 2015: 0.7
- 2016: 1.8
- Compensation of employees 2/:
- 2015: 1.3
- 2016: 3.4
- Purchase of non-financial assets:
- 2015: 0.1
- 2016: 0.2
- 2017: 0.5
- 2018: 0.4
- Balance of payments (percent of GDP, selected lines and projections):
- Current account balance:
- 2015: -8.3
- 2016: -9.4
- 2017: -9.8
- 2018: -10.3
- 2019 (Proj.): -12.8
- 2020 (Proj.): -12.7
- 2021 (Proj.): -13.1
- 2022 (Proj.): -13.7
- Trade balance:
- 2015: -75.2
- 2016: -74.4
- 2017: -86.7
- 2018: -84.8
- 2019 (Proj.): -87.1
- 2020 (Proj.): -84.2
- 2021 (Proj.): -81.8
- 2022 (Proj.): -78.8
- Exports of goods and services:
- 2015: 25.6
- 2016: 25.2
- 2017: 22.6
- 2018: 23.7
- 2019 (Proj.): 23.0
- 2020 (Proj.): 22.8
- 2021 (Proj.): 21.9
- 2022 (Proj.): 21.8
- Imports of goods and services:
- 2015: 100.7
- 2016: 99.6
- 2017: 109.2
- 2018: 108.5
- 2019 (Proj.): 110.1
- 2020 (Proj.): 107.0
- 2021 (Proj.): 103.7
- 2022 (Proj.): 100.6
- Remittances:
- 2015: 32.9
- 2016: 32.5
- 2017: 31.5
- 2018: 31.3
- 2019 (Proj.): 30.9
- 2020 (Proj.): 31.2
- 2021 (Proj.): 31.4
- 2022 (Proj.): 30.8
- Foreign Direct Investment:
- 2015: 7.9
- 2016: 8.2
- 2017: 8.6
- 2018: 9.0
- 2019 (Proj.): 8.9
- 2020 (Proj.): 9.1
- External debt:
- 2015: 108.2
- 2016: 105.3
- 2017: 103.3
- 2018: 99.5
- 2019 (Proj.): 99.4
- 2020 (Proj.): 99.3
- Market exchange rate (SOS/USD, e.o.p.):
- 2015: 22,285
- 2016: 24,005
- 2017: 23,605
- 2018: 24,475
sources: Somali authorities; and Fund staff estimates and projections.
IMF Communications Department; November 18, 2019.