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International Monetary Fund reaches agreement with Somalia

Staff writer |
The International Monetary Fund (IMF) and Somalia are negotiating the adoption by the country of the Fund’s Staff-Monitored Program (SMP).

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Through it, the financial institution will help local authorities to implement reforms so that the country can grow in a continuous and sustainable way.

The IMF technicians and representatives of the Somalia government met from in Nairobi, Kenya, to discuss the plan. According to information, the implementation of the SMP in Somalia will now be analyzed by the IMF’s directors.

In a statement, the head of the Fund’s mission, Rogerio Zandamela, acknowledges that Somalia’s government, since 2012, has been making efforts to revive the local economy and promote growth.

The Fund estimates that last year the Gross Domestic Product (GDP) of the country grew 3.7% over 2014 and that the inflation rate remained at 1%. Even so, Somalia’s still facing great obstacles, such as rebels groups and a “challenging” socioeconomic condition, according to the IMF.

The SMP will be put into action in May with a one-year execution term. In the Fund’s assessment, the program aims at improving governance and economic and social statistics available, the management of financial resources and the support to strengthening the Somali institutions and the financial system.

These measures should bring as results the raising of tax and general revenues, development and execution of a budget and the continuous growth in the next few years.

And the project goes further: “To support financial sector development, the program will initiate a comprehensive currency reform, and strengthen licensing, supervision and regulation of commercial banks and money transfer business”, said Zandamela’s statement.

This stage of the process doesn’t provide the country with financial assistance.

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