MOGADISHU (SD) – The Federal Government of Somalia and the International Monetary Fund (IMF) have reached a key a staff-level agreement on the Debt Forgiveness and Review Phase 2 and 3, following virtual discussions

The International Monetary Fund (IMF) says Somalia’s economy has grown despite challenges posed by drought, COVID, Inflation and Clime Change.

“Notwithstanding these shocks, Somalia has preserved macroeconomic stability, supported in part by the IMF’s 2021 General SDR Allocation. Real GDP growth was estimated at 2 percent in 2021, given the recovery in household consumption. In the face of significant revenue shortfalls (including because budget support grants were on hold until elections were completed), the authorities intensified expenditure prioritization and financed the overall deficit of 1.1 percent of GDP with cash balances and SDRs.” IMF said in an statement.

The IMF has promised to work closely with the new government and the country’s financial institutions.

“Timely support from development partners, both on financing and capacity development, is essential for the successful implementation of the authorities’ reform strategy. Contributions from Somalia’s partners to the Somalia Country Fund are also needed to ensure smooth delivery of IMF technical assistance to support the goals of the ECF-supported program and the HIPC Initiative.” said the IMF

The IMF’s decision follows the May 15 presidential election and a peaceful transition in Somalia.