Kenya: IMF pledges continued technical support to Somalia

Nairobi, Kenya (PANA) - Somalia's economic growth is projected to decelerate to about 2.0 percent, and inflation to increase to above 3 percent this year as drought persists in the Horn of Africa, a mission of the International Monetary Fund (IMF) said on Monday, encouraging authorities in the country to step up efforts to develop local capacity and institutions.

After meeting with the Somali authorities to discuss the latest economic developments and review implementation of reforms under the Staff-Monitored Programme (SMP), Mohamad Elhage, who led the IMF team, said that the Fund would continue to provide the authorities with the needed technical assistance and training in its areas of expertise.

For authorities in Somalia to reach their economic and financial goals, Elhage stated, it is essential that their policies include measures to implement a sound fiscal framework and advance public financial management reforms.

"Prudent budget preparation, renewed efforts to generate higher domestic revenues, and improved cash management and expenditure controls will improve budgetary execution and outturns," he said in a statement issued in Nairobi, Kenya, where the IMF team met with the Somali authorities for five days to discuss the latest economic developments and review implementation of reforms under the SMP.

Elhage said that Somalia's policies should aim to broaden the tax base and enforce efficient collection of taxes and customs, based on existing laws.

Besides, he said they need to jump start financial sector activity by developing and implementing a financial sector roadmap to address obstacles to increased financial intermediation.

"In this context, expanding the regulatory umbrella to the mobile money sector will be essential. We welcome the authorities’ continued progress on currency reform," Elhage added.

The Somali authorities and the IMF mission have reached a staff-level agreement on the completion of the second and final review of the SMP, which was approved by the IMF’s Managing Director at the request of the Federal Government of Somalia on 27 May 2016.

“With the SMP having expired in April, the authorities requested a follow-up SMP to continue supporting macroeconomic stability and capacity development," said the IMF statement, noting that discussions on the new SMP followed the recent London conference on Somalia.

During the conference donors reaffirmed their support, noting the successful election and progress on reforms in Somalia, while also stressing the urgent need to further improve governance, and advance and broaden reforms.

Somali authorities have updated their memorandum of economic and financial policies (MEFP) for 2017-19, in which they outlined important reform agenda.

In Nairobi, the IMF team met with Somalia's Central Bank Governor, Mr. Bashir Issa Ali; Senior Advisor to the President’s Office, Mr. Balal Osman; Representative of the Prime Minister’s Office, Mr. Abdi Abdullahi; and other officials. The team also discussed the MEFP with Finance Minister, Mr. Abdirahman Duale Beileh.
-0- PANA AR 22May2017

22 may 2017 18:03:29

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