WASHINGTON (Reuters) – International Monetary Fund staff on Monday reached a staff-level agreement with Somalia that would allow for the release of the 10 ) The million-dollar IMF mission chief told Reuters that once approved by the board, the IMF mission chief, Laura Jaramillo, said the deal was a deal for Somalia’s The extended credit facility in Nairobi, Kenya, was reached after an in-person review. She praised the authorities for persisting in economic reforms despite a prolonged drought, the fallout from Russia’s war in Ukraine and ongoing security concerns.
The IMF board is expected to review the staff-level agreement in early December, Jaramillo said.
If Somalia continues to make steady progress on reforms, it may reach the completion point of the Heavily Indebted Poor Countries (HIPC) global debt relief process at a later date 2023 , which would reduce Somalia’s debt from $5.2 billion to about 550 million, Jaramillo said.
“This will be a huge milestone,” she said, noting that it will reduce Somalia’s debt from around 90 percent now to domestic about 7% of GDP.
It will also open up the search for new sources of funding for Somalia, which is a great help in the country’s efforts to implement development plans and promote growth and employment. A pillar of the country’s economic reforms will be boosting domestic revenue, including through enhanced sales tax collection.
Given the current severe food crisis, Somalia still needs continued and immediate support from international partners, but also efforts to build long-term resilience to climate shocks, the International Monetary Fund said.
The outlook for Somalia remains cloudy, with GDP growth forecast at 1.9%, lower than 2021, inflation is projected to reach 9% from 4.6% in 10, the International Monetary Fund
if in Without the restoration of healthy rains, near-term risks will rise, including a worsening food crisis that already has 4.3 million people facing severe food insecurity or if commodity prices rise further, it said.
