Somalia: IMF Managing Director approves Staff-Monitored Programme for Somalia

Washington, D.C., US (PANA) - As Somalia slowly recovers from nearly 25 years of civil war, the Managing Director of the International Monetary Fund (IMF) on Friday announced approval of a Staff-Monitored Programme (SMP) for the Horn of Africa country covering the period of May 2016–April 2017.

Given Somalia’s weak administrative capacity, technical assistance is an integral part of the SMP which is geared toward reestablishing macroeconomic stability, building capacity to strengthen macroeconomic management, rebuilding institutions, and improving governance and economic statistics.

In a press statement, the IMF pointed out that weak  institutional capacity, complex clan politics, and a challenging security situation have complicated Somalia's economic reconstruction. As a result, social and economic conditions remain dire.

With continued support from the international community and key donors, the Federal Government of Somalia has initiated important reforms to lay the foundation for the country’s economic reconstruction and requested an IMF SMP to prop up the efforts.

"Under the SMP, fiscal policy and reforms will aim to achieve a zero fiscal balance on a cash basis, while avoiding the accumulation of domestic arrears," the Fund said. "Fiscal reforms will focus on strengthening public financial management, particularly by modernizing tax and customs administration, and budget planning and execution."

Somalia remains unable to access IMF resources because of its continued arrears to the Fund while the country's external debt is high and virtually all in arrears, thus precluding access to external borrowing.

Since the IMF recognition of the Federal Government of Somalia three years ago, Mogadishu has established very good cooperation with the Fund, which in return, has delivered more than 50 technical assistance missions (including training) since 2013, and pledged to intensify training under the SMP to improve institutional capacity.

"IMF staff will work closely with the authorities to monitor progress in the implementation of their economic programme," the statement assured, emphasizing that successful completion of this programme and subsequent SMPs could pave the way to an IMF-supported programme of upper-credit tranche quality for Somalia.

"Continued support from creditors and donors will remain critical for a full normalization and resumption of financial assistance from the IMF," the statement added.
-0- PANA AR 27May2016

27 may 2016 18:02:08

xhtml CSS