## IMF Executive Board Concludes 2024 Article IV Consultation and Second Review Under Extended Credit Facility for Somalia _IMF News, December 10, 2024_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2024 Article IV Consultation and Second Review Under Extended Credit Facility for Somalia](https://www.imf.org/en/news/articles/2024/12/10/pr-24462-somalia-imf-concludes-2024-aiv-consultation-and-2nd-rev-under-ecf) ## Other formats - [Markdown version](/en/news/articles/2024/12/10/pr-24462-somalia-imf-concludes-2024-aiv-consultation-and-2nd-rev-under-ecf/index.md) - [Structured JSON version](/en/news/articles/2024/12/10/pr-24462-somalia-imf-concludes-2024-aiv-consultation-and-2nd-rev-under-ecf/index.json) - [Bundle manifest](/en/news/articles/2024/12/10/pr-24462-somalia-imf-concludes-2024-aiv-consultation-and-2nd-rev-under-ecf/bundle-manifest.json) ## Bibliographic details - Published: December 10, 2024 --- ### Program performance and disbursement - Somalia’s program performance has been strong, demonstrating the authorities’ steadfast commitment to macroeconomic stability and strengthening institutional capacity and frameworks. - The Executive Board completed the 2024 Article IV Consultation and the second review under the Extended Credit Facility (ECF) arrangement for Somalia on December 9. - Immediate disbursement enabled: - SDR 7.5 million (about US$ 10 million) disbursed upon the Board’s decision. - Total disbursements under the ECF to date: SDR 45 million (about US$ 60 million). - Original ECF approval: - ECF arrangement approved on December 19, 2023 for SDR 75 million (about US$100 million). ### Macroeconomic outlook and projections - Real GDP growth projections: - Upgraded to 4 percent for 2024. - Upgraded to 4 percent for 2025. - Inflation outlook: - Expected to continue on a downward trend to 4.5 percent by end 2024, with the pace slower than anticipated earlier. - Growth drivers cited: - Strong exports and remittances. - Positive trends in agriculture, exports, and remittances in 2024 expected to continue in 2025. ### Risks and near-term vulnerabilities - Elevated risks include: - Regional and domestic security developments. - Climate shocks. - Commodity price developments. - Lower global growth. - Security transition note: - Somali government continues to work with international partners to ensure a successful transition from the current African Union Transition Mission to a new force by January 2025. ### Policy priorities and reforms recommended - Fiscal policy and public finance: - Continue fiscal reforms to strengthen domestic revenue mobilization, especially given prospects of declining external grants and large social and development spending needs. - Strengthen tax capacity, public financial management, investment and debt management, and spending efficiency. - Continue progress on the fiscal federalism agenda, customs modernization, implementation of the Income Tax Law, and stronger tax enforcement. - Conduct careful fiscal impact assessment of wage bill and pension reforms before implementation. - Central bank, financial sector, and currency policy: - Ongoing efforts to strengthen central bank institutional capacity are commendable. - Promote financial deepening and financial inclusion; advance reforms to improve the AML/CFT framework. - Preparatory work to reintroduce the Somali shilling and adopt a currency board arrangement is welcome; a gradual and carefully managed implementation strategy is warranted with support from the IMF and the World Bank. - Complementary policies needed to protect the credibility of the currency board arrangement, including fiscal sustainability and central bank operational independence. - Governance, transparency, and anti-corruption: - Further reforms to improve governance are encouraged, including measures to enhance transparency and accountability in the petroleum sector. - Continue steps to improve governance and fight corruption and sustain efforts in this regard. - Address AML/CFT deficiencies and implement the legal framework for the petroleum sector. - Social inclusion and resilience: - Promote inclusive growth by addressing food insecurity, building climate resilience, improving access to education and health, and enhancing trade integration. - Increase access to and close gender gaps in education. - Continued and timely support from development partners, including capacity development, is important for implementing the reform agenda. ### Executive Board assessment - Directors agreed with the thrust of the staff appraisal and commended: - Reaching the HIPC completion point in December 2023. - Continued commitment to economic reform and strong performance under the Fund‑supported program. - Directors emphasized: - Sustaining reform momentum to increase resilience, reduce poverty, and promote inclusive growth amid downside risks from fragility, regional tensions, climate shocks, and food insecurity. - The vital role of continued donor support and capacity development facilitated by the Fund and other development partners. - Need for careful and gradual accession to the East African Community, noting opportunities, challenges, and risks. - Financial sector and safeguards: - Welcomed enhancement of the central bank’s governance and legal frameworks and progress on recommendations from the 2024 Safeguards Assessment. - Recommended continued reforms to promote financial deepening and inclusion, and further strengthen financial regulation and supervisory capacity. *Press Release No. 24/462 — IMF, December 10, 2024.* --- ## References - [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) - [PRESS CENTER](http://presscenter.imf.org/) - [Press Release No. 23/463](https://www.imf.org/en/News/Articles/2023/12/19/pr23463-somalia-imf-executive-board-approves-usd100-million-under-new-ecf-arrangement) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2024/12/10/pr-24462-somalia-imf-concludes-2024-aiv-consultation-and-2nd-rev-under-ecf_