## IMF Staff Completes 2017 Article IV Consultation Discussions and First Review under the Staff-Monitored Program with Somalia _IMF News, December 12, 2017_ ## Source details **Canonical URL:** [IMF Staff Completes 2017 Article IV Consultation Discussions and First Review under the Staff-Monitored Program with Somalia](https://www.imf.org/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia) ## Other formats - [Markdown version](/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia/index.md) - [Structured JSON version](/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia/index.json) - [Bundle manifest](/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia/bundle-manifest.json) ## Bibliographic details - Published: December 12, 2017 --- ### Mission overview and context - 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. ### Economic developments and projections - 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. ### Program implementation and institutional progress - The authorities’ performance under the SMP through September 2017 was broadly satisfactory. - Authorities have: - Updated their memorandum of economic and financial policies for the period 2018—19. - Nearly completed the currency reform roadmap. - Drafted a roadmap for the development of the financial sector. - The mission emphasized the need to continue rebuilding key economic and financial institutions and improving economic and financial data. ### Key policy recommendations and reform priorities - Strengthen economic resilience, accelerate the recovery and foster social inclusion: - Continue advancing the broad-based growth reform agenda outlined under the mutual accountability framework in collaboration with development partners. - Update the National Development Plan with increased focus on governance, anti-corruption, and social safety net programs. - Continue to improve capacity and governance: - Redouble efforts to develop capacity of public institutions and rebuild economic and financial data. - IMF stands ready to intensify capacity development activities in Somalia using the multi-donor trust fund to help rebuild institutions and infrastructure. - Authorities are encouraged to continue tangible initiatives to combat corruption and improve governance. - Enhance fiscal discipline and the fiscal framework: - Adhere to fiscal discipline and improve the fiscal framework. - Refrain from any expenditures that are not fully covered by realistic revenue projections or grants. - Remain current on the government’s obligations. - Enhance public financial management and cash management to improve budget execution and avoid accumulation of domestic arrears. - Increase domestic revenues by expanding the revenue base, initially focusing on the sales tax and customs, to provide additional resources for priority spending. - Carefully prepare the currency reform and strengthen financial institutions: - With preconditions for currency reform nearly completed, carefully prepare for the launch of the new Somali Shilling. - Maintain political support for combating counterfeiting; develop a well-designed communications strategy for the launch of the new currency. - Complete and implement the draft financial sector roadmap to revive the nascent financial sector and support economic growth and poverty reduction. *Press Release No. 17/483 — IMF Communications Department, December 12, 2017.* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2017/12/12/pr17483-imf-staff-completes-2017-article-iv-consultation-discussions-and-first-review-somalia_