{
  "title": "IMF Executive Board Concludes 2019 Article IV Consultation with Somalia",
  "publication": "IMF News, August 1, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/08/01/pr19309-somalia-imf-executive-board-concludes-2019-article-iv-consultation-with-somalia",
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  "summary": "GDP growth: estimated at 2.8 percent in 2018 (after 1.4 percent in 2017); if normal rains resume, growth could remain broadly unchanged at around 2.9 percent in 2019.",
  "publishDate": "2019-08-01",
  "sections": [
    {
      "heading": "Economic outlook and key indicators",
      "content": "- GDP growth: estimated at 2.8 percent in 2018 (after 1.4 percent in 2017); if normal rains resume, growth could remain broadly unchanged at around 2.9 percent in 2019.\n- Inflation: expected at 3.0 percent in 2019, following 3.2 percent in 2018.\n- Per capita GDP (U.S. dollars): 310 (2015), 313 (2016), 327 (2017), 332 (2018), 339 (2019 proj.), 347 (2020 proj.), 357 (2021 proj.), 368 (2022 proj.).\n- Nominal GDP in millions of U.S. dollars: 4,049 (2015), 4,198 (2016), 4,509 (2017), 4,721 (2018), 4,958 (2019 proj.), 5,218 (2020 proj.), 5,507 (2021 proj.), 5,816 (2022 proj.).\n- Real GDP, annual percentage change: 3.5 (2015), 2.9 (2016), 1.4 (2017), 2.8 (2018), 3.2 (2019 proj.).\n- Consumer prices (e.o.p., percent change): 0.3 (2015), 1.2 (2016), 6.1 (2017), 3.0 (2018), 2.7 (2019 proj.), 2.3 (2020 proj.), 2.2 (2021 proj.)."
    },
    {
      "heading": "Fiscal developments and public finances",
      "content": "- Domestic revenue: almost 30 percent higher than in 2017 (as reflected from FGS efforts to broaden the tax base and strengthen tax administration).\n- Central government finances (percent of GDP) — Revenue and grants: 4.1 (2015), 6.0 (2016), 5.7 (2017), 6.9 (2018), 7.2 (2019 proj.), 7.4 (2020 proj.), 7.7 (2021 proj.).\n- Grants (percent of GDP): 0.7 (2015), 1.8 (2016).\n- Expenditure (percent of GDP) and composition: compensation of employees shows notable increases (compensation of employees 3/ and purchase of non‑financial assets figures reflected in table).\n- Stock of domestic arrears (percent of GDP): 1.7 (2015), 1.5 (2016), 1.1 (2017), 0.8 (2018), 0.6 (2019 proj.).\n- Fiscal operations: Budget data for the Federal Government of Somalia recorded on a cash basis. GDP data cover the entire territory of Somalia.\n- Staff note: expenditures remain dominated by salaries and other operating costs, especially security-related expenditures, limiting space for critical social and development programs."
    },
    {
      "heading": "Debt, external position, and balance of payments",
      "content": "- External debt: at about $4.7 billion or 100 percent of GDP in 2018, of which 96 percent is in arrears (debt described as unsustainable).\n- Current account balance (percent of GDP): -6.0 (2015), -9.4 (2016), -9.0 (2017), -8.3 (2018), -8.0 (2019 proj.), -8.9 (2020 proj.).\n- Trade balance (percent of GDP): -72.8 (2015), -74.5 (2016), -80.5 (2017), -73.7 (2018), -72.6 (2019 proj.), -71.1 (2020 proj.), -71.4 (2021 proj.), -70.6 (2022 proj.).\n- Exports of goods and services (percent of GDP): 25.6 (2015), 25.4 (2016), 22.1 (2017), 25.9 (2018), 26.8 (2019 proj.), 26.5 (2020 proj.), 27.0 (2021 proj.).\n- Imports of goods and services (percent of GDP): 98.5 (2015), 99.9 (2016), 102.6 (2017), 99.6 (2018), 99.4 (2019 proj.), 97.6 (2020 proj.).\n- Remittances (percent of GDP): 32.9 (2015), 32.5 (2016), 31.5 (2017), 29.2 (2018), 28.8 (2019 proj.), 29.1 (2020 proj.), 34.9 (2021 proj.), 33.3 (2022 proj.).\n- Foreign Direct Investment (percent of GDP): 7.9 (2015), 8.2 (2016), 8.6 (2017), 9.0 (2018), 8.9 (2019 proj.).\n- Central bank balances (Millions of U.S. Dollars and percent): foreign assets (gross) 68.6 (2015), 60.9 (2016), 89.2 (2017), 118.9 (2018); gross reserves of the central bank 42.6 (2015), 41.8 (2016), 48.1 (2017), 51.1 (2018); net foreign assets, excl. IMF 21.6 (2015), 24.0 (2016), 26.2 (2017); CBS liabilities to government 5.4 (2015), 29.3 (2016), 39.5 (2017).\n- Market exchange rate (SOS/USD, e.o.p.): 22,285 (2015), 24,005 (2016), 23,605 (2017), 24,475 (2018)."
    },
    {
      "heading": "Financial sector, AML/CFT, and governance",
      "content": "- Financial sector stability: authorities have made efforts to enhance financial sector stability and strengthen supervision; bringing mobile money service providers under regulatory umbrella identified as a key near‑term priority.\n- AML/CFT: progress in strengthening the anti‑money laundering and combating the financing of terrorism regime, but remaining legal and operational gaps need to be addressed.\n- Governance and institutions: Directors encouraged continued progress on addressing governance weaknesses and the risk of corruption; passage of key legislation—including on revenue, PFM, audit, petroleum, statistics, and anti‑corruption—would promote better governance and transparency.\n- Statistics and capacity: Directors encouraged further efforts to strengthen statistical institutions and address data gaps; intensive capacity development support will need to be sustained."
    },
    {
      "heading": "Somalia’s program and IMF support (SMP and debt relief path)",
      "content": "- Somalia’s fourth SMP: May 2019–July 2020; will support continued reform efforts to build fiscal sustainability across the FGS and Federal Member States, improve financial stability, address residual AML/CFT gaps, and strengthen governance and the fight against corruption.\n- Debt relief and HIPC: Directors concurred that Somalia’s external debt is unsustainable and supported efforts toward the Heavily Indebted Poor Country (HIPC) initiative Decision Point.\n- Fund engagement: Directors agreed the macroeconomic and structural policies under the fourth SMP meet policy standards associated with upper credit tranche arrangements.\n- Token payments: Directors welcomed the authorities’ intention to begin making token payments to the IMF in 2020 and stressed these should be very small given Somalia’s limited resources and challenging circumstances.\n- Financing for arrears clearance and debt relief: Directors noted satisfactory SMP implementation can help establish a track record and pave the way toward arrears clearance and eventual debt relief under HIPC; mobilizing necessary financing, including to meet the costs for the Fund, will require concerted membership effort and further discussion of financing options."
    },
    {
      "heading": "Executive Board assessment and policy priorities",
      "content": "- Board view: Executive Directors commended authorities’ strong commitment to implementing three consecutive SMPs and noted gradual economic recovery reflected sustained policy and reform efforts coupled with strong donor support.\n- Policy recommendations and priorities highlighted by Directors:\n  - Continue public financial management (PFM) reforms, strengthen commitment controls, and embed procurement improvements.\n  - Implement a strong fiscal framework, supported by effective natural resource management and revenue‑sharing frameworks with Federal Member States.\n  - Substantially boost revenue mobilization to create space for development spending and fiscal self‑sufficiency.\n  - Strengthen financial supervision and bring mobile money providers under regulation.\n  - Address remaining AML/CFT legal and operational gaps.\n  - Passage of key legislation on revenue, PFM, audit, petroleum, statistics, and anti‑corruption.\n  - Sustain intensive capacity development support to bolster ongoing reforms.\n  - Maintain consultation with a wide set of stakeholders in preparing the National Development Plan.\n- Recognition of risks: Directors recognized challenging security and political situation and noted poor rainfall in Spring weighs on the outlook and threatens food security.\n\nIMF Communications Department, August 1, 2019.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\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- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/08/01/pr19309-somalia-imf-executive-board-concludes-2019-article-iv-consultation-with-somalia"
    }
  ],
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    "Published: August 1, 2019",
    "GDP growth: estimated at 2.8 percent in 2018 (after 1.4 percent in 2017); if normal rains resume, growth could remain broadly unchanged at around 2.9 percent in 2019.",
    "Inflation: expected at 3.0 percent in 2019, following 3.2 percent in 2018.",
    "Per capita GDP (U.S. dollars): 310 (2015), 313 (2016), 327 (2017), 332 (2018), 339 (2019 proj.), 347 (2020 proj.), 357 (2021 proj.), 368 (2022 proj.).",
    "Nominal GDP in millions of U.S. dollars: 4,049 (2015), 4,198 (2016), 4,509 (2017), 4,721 (2018), 4,958 (2019 proj.), 5,218 (2020 proj.), 5,507 (2021 proj.), 5,816 (2022 proj.).",
    "Real GDP, annual percentage change: 3.5 (2015), 2.9 (2016), 1.4 (2017), 2.8 (2018), 3.2 (2019 proj.).",
    "Consumer prices (e.o.p., percent change): 0.3 (2015), 1.2 (2016), 6.1 (2017), 3.0 (2018), 2.7 (2019 proj.), 2.3 (2020 proj.), 2.2 (2021 proj.).",
    "Domestic revenue: almost 30 percent higher than in 2017 (as reflected from FGS efforts to broaden the tax base and strengthen tax administration).",
    "Central government finances (percent of GDP) — Revenue and grants: 4.1 (2015), 6.0 (2016), 5.7 (2017), 6.9 (2018), 7.2 (2019 proj.), 7.4 (2020 proj.), 7.7 (2021 proj.).",
    "Grants (percent of GDP): 0.7 (2015), 1.8 (2016).",
    "Expenditure (percent of GDP) and composition: compensation of employees shows notable increases (compensation of employees 3/ and purchase of non‑financial assets figures reflected in table).",
    "Stock of domestic arrears (percent of GDP): 1.7 (2015), 1.5 (2016), 1.1 (2017), 0.8 (2018), 0.6 (2019 proj.).",
    "Fiscal operations: Budget data for the Federal Government of Somalia recorded on a cash basis. GDP data cover the entire territory of Somalia.",
    "Staff note: expenditures remain dominated by salaries and other operating costs, especially security-related expenditures, limiting space for critical social and development programs.",
    "External debt: at about $4.7 billion or 100 percent of GDP in 2018, of which 96 percent is in arrears (debt described as unsustainable).",
    "Current account balance (percent of GDP): -6.0 (2015), -9.4 (2016), -9.0 (2017), -8.3 (2018), -8.0 (2019 proj.), -8.9 (2020 proj.).",
    "Trade balance (percent of GDP): -72.8 (2015), -74.5 (2016), -80.5 (2017), -73.7 (2018), -72.6 (2019 proj.), -71.1 (2020 proj.), -71.4 (2021 proj.), -70.6 (2022 proj.).",
    "Exports of goods and services (percent of GDP): 25.6 (2015), 25.4 (2016), 22.1 (2017), 25.9 (2018), 26.8 (2019 proj.), 26.5 (2020 proj.), 27.0 (2021 proj.).",
    "Imports of goods and services (percent of GDP): 98.5 (2015), 99.9 (2016), 102.6 (2017), 99.6 (2018), 99.4 (2019 proj.), 97.6 (2020 proj.).",
    "Remittances (percent of GDP): 32.9 (2015), 32.5 (2016), 31.5 (2017), 29.2 (2018), 28.8 (2019 proj.), 29.1 (2020 proj.), 34.9 (2021 proj.), 33.3 (2022 proj.).",
    "Foreign Direct Investment (percent of GDP): 7.9 (2015), 8.2 (2016), 8.6 (2017), 9.0 (2018), 8.9 (2019 proj.).",
    "Central bank balances (Millions of U.S. Dollars and percent): foreign assets (gross) 68.6 (2015), 60.9 (2016), 89.2 (2017), 118.9 (2018); gross reserves of the central bank 42.6 (2015), 41.8 (2016), 48.1 (2017), 51.1 (2018); net foreign assets, excl. IMF 21.6 (2015), 24.0 (2016), 26.2 (2017); CBS liabilities to government 5.4 (2015), 29.3 (2016), 39.5 (2017).",
    "Market exchange rate (SOS/USD, e.o.p.): 22,285 (2015), 24,005 (2016), 23,605 (2017), 24,475 (2018).",
    "Financial sector stability: authorities have made efforts to enhance financial sector stability and strengthen supervision; bringing mobile money service providers under regulatory umbrella identified as a key near‑term priority.",
    "AML/CFT: progress in strengthening the anti‑money laundering and combating the financing of terrorism regime, but remaining legal and operational gaps need to be addressed.",
    "Governance and institutions: Directors encouraged continued progress on addressing governance weaknesses and the risk of corruption; passage of key legislation—including on revenue, PFM, audit, petroleum, statistics, and anti‑corruption—would promote better governance and transparency.",
    "Statistics and capacity: Directors encouraged further efforts to strengthen statistical institutions and address data gaps; intensive capacity development support will need to be sustained.",
    "Somalia’s fourth SMP: May 2019–July 2020; will support continued reform efforts to build fiscal sustainability across the FGS and Federal Member States, improve financial stability, address residual AML/CFT gaps, and strengthen governance and the fight against corruption.",
    "Debt relief and HIPC: Directors concurred that Somalia’s external debt is unsustainable and supported efforts toward the Heavily Indebted Poor Country (HIPC) initiative Decision Point.",
    "Fund engagement: Directors agreed the macroeconomic and structural policies under the fourth SMP meet policy standards associated with upper credit tranche arrangements.",
    "Token payments: Directors welcomed the authorities’ intention to begin making token payments to the IMF in 2020 and stressed these should be very small given Somalia’s limited resources and challenging circumstances.",
    "Financing for arrears clearance and debt relief: Directors noted satisfactory SMP implementation can help establish a track record and pave the way toward arrears clearance and eventual debt relief under HIPC; mobilizing necessary financing, including to meet the costs for the Fund, will require concerted membership effort and further discussion of financing options.",
    "Board view: Executive Directors commended authorities’ strong commitment to implementing three consecutive SMPs and noted gradual economic recovery reflected sustained policy and reform efforts coupled with strong donor support.",
    "Policy recommendations and priorities highlighted by Directors:",
    "Recognition of risks: Directors recognized challenging security and political situation and noted poor rainfall in Spring weighs on the outlook and threatens food security.",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[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/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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