The Executive Board of the International Monetary Fund (IMF) completed on Wednesday the first review of the Extended Credit Facility (ECF) agreement for Somalia, which allows for the immediate disbursement of US $ 10 million to support its National Development Plan.
The loan brings Somalia’s total disbursements under the deal to $ 365.5 million, according to a press release issued by the IMF on Thursday.
Somalia’s ECF agreement was originally approved by the Executive Board on March 25, 2020 for US $ 395.5 million, with the goal of implementing the National Development Plan and anchoring reforms between the HIPC Decision and Completion Points.
Following the Board’s discussion, Ms Antoinette Sayeh, Deputy Managing Director and Acting President of the IMF, stated that the performance of the ECF-supported program has been largely satisfactory, despite the triple impact of COVID-19, flooding and the desert locusts that struck Somalia.
“The authorities have taken swift and appropriate measures, with the support of the international community, to mitigate the effects of these shocks, including the provision of temporary tax breaks on basic food products, the expansion of the social safety net and the concession credit to micro, small and medium-sized enterprises, ”said Ms Sayeh.
He noted that the Somali authorities remain steadfast in their commitment to the program’s broader policies and reforms, which are critical to increasing inclusive growth and reducing poverty in the long term.
“The implementation of the proposed budget for 2021 will support increased internal revenue mobilization and continued control over discretionary operating expenses, creating scope for spending on the priorities identified in the authorities’ Ninth National Development Plan,” Sayeh said.
The IMF Executive Board welcomed plans by the Somali authorities to improve fiscal transparency and accountability, and recent steps to deepen intergovernmental fiscal relations.
Their commitment to improving governance and fighting corruption is also encouraging, as are planned steps to increase transparency and accountability in the licensing framework for the telecommunications sector, the Board said, underscoring the urgency to advance the licensing and regulation of mobile money operators.
“Efforts to strengthen the central bank’s organizational capacity are commendable. Continuous capacity building of all stakeholders is needed to improve AML / CFT compliance, and the national risk assessment should be completed as quickly as possible, ”said Ms Sayeh.
“Sustained efforts are needed to reach agreement with external creditors on debt relief in accordance with the HIPC framework, along with measures to strengthen debt management capacity, to safeguard debt sustainability.
“Continued capacity development will be required to support the successful completion of the ECF-supported program and reach the HIPC completion point. The support of Somalia partners to the Somalia Trust Fund will be required to ensure a continuous and smooth delivery of IMF technical assistance in support of the objectives of the PCE.
program and the HIPC Initiative, ”he added. (PANA / NAN)