The Executive Board of the International Monetary Fund (IMF) has completed the third review of Somalia’s debt relief program, allowing for the immediate release of up to $10 million.
The money will be used to support the government’s budget to accelerate economic reforms.
The IMF said Somalia’s economy faces challenges including declining international aid, climate change, and high uncertainty. Economic growth is expected to slow to 3% in 2025, compared to an estimated 4% in 2024.
However, the IMF said the Somali government is making good progress on its economic reform program, with a focus on boosting domestic revenue, public financial management, and improving economic confidence. It also noted the importance of donor support to sustain the reforms.
The IMF commended the government’s efforts to improve tax collection, modernize customs, implement a new income tax law, and manage the government’s finances and debt.
It also praised progress in building the capacity of the Central Bank and the plan to reintroduce the Somali shilling, which is largely unused in the country.
In addition, the IMF said that Somalia has made progress in establishing good governance, especially in the oil sector, and that it is important to manage these resources transparently.
