Mogadishu (KAAB TV) – The Executive Board of the International Monetary Fund (IMF) has completed the third review of Somalia’s debt relief program under the Heavily Indebted Poor Countries (HIPC) Initiative.
As a result of the review, the IMF has approved the immediate disbursement of $10 million to support the Somali government’s budget and ongoing economic reform agenda.
The IMF noted that Somalia continues to face a challenging economic environment, marked by a decline in international aid, the impacts of climate change, and persistent uncertainty. These headwinds are expected to dampen economic growth, which is projected to slow to 3% in 2025, down from an estimated 4% in 2024.
Despite these challenges, the IMF commended the Somali government’s commitment to its economic reform program. The program focuses on boosting domestic revenue collection, strengthening public financial management, and enhancing economic transparency and confidence. The Fund emphasized that sustained support from international donors remains critical to ensuring the continuity and success of these reforms.
The IMF praised several key achievements by the Somali government, including improvements in tax administration, modernization of customs systems, and the implementation of a new income tax law. Additionally, the government’s efforts to manage public debt more effectively and strengthen monetary policy were highlighted as positive steps toward long-term fiscal sustainability.
Progress in rebuilding the capacity of the Central Bank of Somalia was also recognized, particularly in its efforts to reintroduce and stabilize the Somali Shilling as a national currency—an essential move toward restoring monetary sovereignty, as the currency is currently not widely used across the country.
Furthermore, the IMF welcomed Somalia’s advancements in promoting good governance, especially within the petroleum sector. The Fund stressed the importance of ensuring transparency and accountability in the management of natural resources to foster public trust and long-term economic stability.
The successful completion of this review signals continued international confidence in Somalia’s reform path and economic trajectory, although considerable challenges remain. With sustained reforms and robust support from development partners, Somalia is seen as having the potential to lay a solid foundation for sustainable growth and poverty reduction.