{
  "title": "IMF Staff Completes 2017 Article IV Consultation Discussions and First Review under the Staff-Monitored Program with Somalia",
  "publication": "IMF News, December 12, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia",
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  "summary": "An IMF team led by Mohamad Elhage visited Nairobi, Kenya during December 5-11 to conduct the 2017 Article IV Consultation and the first review of the Staff Monitored Program (SMP).",
  "publishDate": "2017-12-12",
  "sections": [
    {
      "heading": "Mission overview and context",
      "content": "- An IMF team led by Mohamad Elhage visited Nairobi, Kenya during December 5-11 to conduct the 2017 Article IV Consultation and the first review of the Staff Monitored Program (SMP).\n- On June 21, 2017, IMF management approved a 12-month SMP covering the period May 2017—April 2018, following Somalia’s successful completion of its first SMP since the end of the civil war.\n- The SMP is designed to help economic reconstruction efforts and to start establishing a track record of policy and reform implementation.\n- The IMF mission met with: Finance Minister Mr. Abdirahman Beileh; Minister of Fisheries and Marine Resources, Mr. Abdirahman M. Abdi Hashi; Central Bank Governor, Mr. Bashir Issa Ali; the Accountant General, Ms. Fatuma Osman Farah; Mr. Abdirahman M. Abdullahi, Advisor to the Prime Minister; Ms. Hodan Isse, Board of Governors of the Central Bank; other officials; and representatives from development partners."
    },
    {
      "heading": "Economic developments and projections",
      "content": "- 2017: Growth is projected to remain subdued at 1.8 percent.\n- 2017: Inflation is projected to pick up to 3.7 percent.\n- 2016: Growth was 2.4 percent.\n- 2016: Inflation was 1.3 percent.\n- Trade deficit is projected to remain high—reflecting increased food imports and lower exports—and will be largely financed by grants and remittances.\n- The drought and sporadic terrorist attacks in 2017 negatively affected economic activity and temporarily impacted the Federal Government of Somalia’s tax collection efforts.\n- Sustained international support helped avoid a severe humanitarian crisis in 2017.\n- 2018–19: Growth is expected to recover to 2.5–3.0 percent.\n- 2018–19: Inflation is expected to decline to 2.0-2.5."
    },
    {
      "heading": "Program implementation and institutional progress",
      "content": "- The authorities’ performance under the SMP through September 2017 was broadly satisfactory.\n- Authorities have:\n  - Updated their memorandum of economic and financial policies for the period 2018—19.\n  - Nearly completed the currency reform roadmap.\n  - Drafted a roadmap for the development of the financial sector.\n- The mission emphasized the need to continue rebuilding key economic and financial institutions and improving economic and financial data."
    },
    {
      "heading": "Key policy recommendations and reform priorities",
      "content": "- Strengthen economic resilience, accelerate the recovery and foster social inclusion:\n  - Continue advancing the broad-based growth reform agenda outlined under the mutual accountability framework in collaboration with development partners.\n  - Update the National Development Plan with increased focus on governance, anti-corruption, and social safety net programs.\n- Continue to improve capacity and governance:\n  - Redouble efforts to develop capacity of public institutions and rebuild economic and financial data.\n  - IMF stands ready to intensify capacity development activities in Somalia using the multi-donor trust fund to help rebuild institutions and infrastructure.\n  - Authorities are encouraged to continue tangible initiatives to combat corruption and improve governance.\n- Enhance fiscal discipline and the fiscal framework:\n  - Adhere to fiscal discipline and improve the fiscal framework.\n  - Refrain from any expenditures that are not fully covered by realistic revenue projections or grants.\n  - Remain current on the government’s obligations.\n  - Enhance public financial management and cash management to improve budget execution and avoid accumulation of domestic arrears.\n  - Increase domestic revenues by expanding the revenue base, initially focusing on the sales tax and customs, to provide additional resources for priority spending.\n- Carefully prepare the currency reform and strengthen financial institutions:\n  - With preconditions for currency reform nearly completed, carefully prepare for the launch of the new Somali Shilling.\n  - Maintain political support for combating counterfeiting; develop a well-designed communications strategy for the launch of the new currency.\n  - Complete and implement the draft financial sector roadmap to revive the nascent financial sector and support economic growth and poverty reduction.\n\nPress Release No. 17/483 — IMF Communications Department, December 12, 2017.\n\n---\n\n\n References\n\n- Somalia and the IMF\n- IMF Policy Advice -- A Factsheet\n- The IMF and Good Governance -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- No. 17/186\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia"
    }
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    "Published: December 12, 2017",
    "An IMF team led by Mohamad Elhage visited Nairobi, Kenya during December 5-11 to conduct the 2017 Article IV Consultation and the first review of the Staff Monitored Program (SMP).",
    "On June 21, 2017, IMF management approved a 12-month SMP covering the period May 2017—April 2018, following Somalia’s successful completion of its first SMP since the end of the civil war.",
    "The SMP is designed to help economic reconstruction efforts and to start establishing a track record of policy and reform implementation.",
    "The IMF mission met with: Finance Minister Mr. Abdirahman Beileh; Minister of Fisheries and Marine Resources, Mr. Abdirahman M. Abdi Hashi; Central Bank Governor, Mr. Bashir Issa Ali; the Accountant General, Ms. Fatuma Osman Farah; Mr. Abdirahman M. Abdullahi, Advisor to the Prime Minister; Ms. Hodan Isse, Board of Governors of the Central Bank; other officials; and representatives from development partners.",
    "2017: Growth is projected to remain subdued at 1.8 percent.",
    "2017: Inflation is projected to pick up to 3.7 percent.",
    "2016: Growth was 2.4 percent.",
    "2016: Inflation was 1.3 percent.",
    "Trade deficit is projected to remain high—reflecting increased food imports and lower exports—and will be largely financed by grants and remittances.",
    "The drought and sporadic terrorist attacks in 2017 negatively affected economic activity and temporarily impacted the Federal Government of Somalia’s tax collection efforts.",
    "Sustained international support helped avoid a severe humanitarian crisis in 2017.",
    "2018–19: Growth is expected to recover to 2.5–3.0 percent.",
    "2018–19: Inflation is expected to decline to 2.0-2.5.",
    "The authorities’ performance under the SMP through September 2017 was broadly satisfactory.",
    "Authorities have:",
    "The mission emphasized the need to continue rebuilding key economic and financial institutions and improving economic and financial data.",
    "Strengthen economic resilience, accelerate the recovery and foster social inclusion:",
    "Continue to improve capacity and governance:",
    "Enhance fiscal discipline and the fiscal framework:",
    "Carefully prepare the currency reform and strengthen financial institutions:",
    "[Somalia and the IMF](http://www.imf.org/external/country/SOM/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[The IMF and Good Governance -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/the-imf-and-good-governance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[No. 17/186](http://www.imf.org/en/News/Articles/2017/05/22/pr17186-imf-reaches-staff-level-agreement-on-a-second-staff-monitored-program-with-somalia)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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