Somalia: IMF Executive Board Concludes the Third Review of the Extended Credit Facility for Somalia

9 July 2025
International Monetary Fund (Washington, DC)
document

Washington, DC: The Executive Board of the International Monetary Fund (IMF) today completed the third review of Somalia's economic reform program supported by the Extended Credit Facility (ECF) arrangement. The Board's decision enables the immediate disbursement of SDR 7.5 million (about US$ 10 million), which will be channeled for budget support, bringing Somalia's total disbursement under the ECF to SDR 52.5 million (about US$ 70 million).

Somalia's ECF arrangement was originally approved by the Executive Board on December 19, 2023 (see Press Release No. 23/463 ). The program supports the authorities' post-HIPC reform strategy to further strengthen key economic institutions and promote macroeconomic stability and growth, in line with Somalia's National Transformation Plan and Centennial Vision 2060.

Following the Executive Board discussion, Mr. Nigel Clarke, Deputy Managing Director and Chair, made the following statement:

Follow us on WhatsApp | LinkedIn for the latest headlines

"The Somali authorities have maintained reform momentum with strong performance under their Fund-supported program despite significant global and domestic challenges. The newly launched National Transformation Plan provides a welcome medium-term reform agenda to build resilience, promote inclusive growth, and reduce poverty. Nevertheless, foreign aid cuts and the associated high uncertainty could weigh on Somalia's economic and social outlook. This highlights the urgency of strengthening domestic revenue mobilization to create room for social and development spending. Moreover, continued assistance from development partners remains critical for the successful implementation of the reform strategy.

"The authorities' strong revenue performance and steadfast implementation of revenue-enhancing reforms are welcome and should be intensified. Key reforms include continuing customs modernization, implementing the new Income Tax Law, and further enhancing revenue administration. Strengthening public financial and debt management is also important. In particular, the implementation of the Pay and Grade reform and the new pension regime for civil servants should be carefully managed to ensure fiscal sustainability.

"Progress to improve the central bank's institutional framework and build its capacity is commendable. Continued efforts are recommended to promote financial deepening and inclusion as well as to further enhance the AML/CFT framework. The authorities are also encouraged to continue their work toward carefully reintroducing the Somali Shilling and adopting a currency board arrangement.

"The adoption of a comprehensive legal framework to enhance governance in the petroleum sector is an important milestone. Its effective implementation is key to ensuring accountability and transparency in this industry. Further reforms to improve governance and fight corruption are also recommended."

Read the original article on IMF.

Tagged:
Copyright © 2025 International Monetary Fund. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 600 reports a day from more than 90 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.