Somalias economy stabilizing Report

In its first review of Somalia’s economy in a generation, the International Monetary Fund (IMF) has said the Horn of Africa nation has made significant progress since it resumed relations with the international community.

However, Somalia’s situation remains fragile and international support will be vital to rebuild institutions and restore normalcy, this is according to the IMF’s assessment report.

The IMF report indicates that with modest progress on the security front and an absence of drought, medium-term annual growth should be about five percent.

Growth will remain inadequate to redress poverty and gender disparities.

The IMF said the federal government, working with the international community, has taken steps to improve governance based on the rule of law and the application of international good practices for fiscal and financial operations.

The IMF is for now precluded from providing new loans to Somalia pending clearance of the country’s arrears of about 33 billion shillings.

“According to the UNDP, about 73 percent of the Somali population lives below the poverty line of USD 2 a day. That said, the economic conditions have recovered significantly since the end of the civil war, and in particular, in 2014, GDP is estimated to have grown by about 4 percent, inflation remain low about 1 percent,” said Rogerio Zandamela, IMF mission chief to Somalia.

“Medium-term recommendations that are critically important for Somalia to be able to sustain its growth over the medium term, in particular building proper economic and financial institutions including the Central Bank and the Ministry of Finance. We are dealing with issues of the proper management of natural resources, and last, having a proper framework for remittances to continue to flow to Somalia,” he added.