IMF Executive Board Completes the Second and Third Reviews of the Extended Credit Facility for Somalia

GOOBJOOG NEWS|WASHINGTON DC: The Executive Board of the International Monetary Fund (IMF) on June 17 completed the second and third reviews of the Extended Credit Facility (ECF) arrangement for Somalia. 

The Board’s decision enables the immediate disbursement of SDR 14 million (about US$ 18.8 million), bringing Somalia’s total disbursement under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) to SDR 271.4 million (about US$ 384.3 million). 

Somalia’s ECF arrangement was originally approved by the Executive Board on March 25, 2020 as part of a three-year blended arrangement under the ECF and the EFF, which involved access of SDR 252.86 million (155 percent of quota) under the ECF and SDR 39.57 million (24 percent of quota) under the EFF. 

As the full amount of the EFF arrangement was made available on approval and drawn at the first purchase, the EFF arrangement lapsed immediately. The ECF arrangement supports the implementation of the authorities’ National Development Plan and anchors reforms between the HIPC Decision and Completion Points.

Following the Executive Board discussion, Ms. Antoinette Sayeh, Deputy Managing Director and Acting Chair, made the following statement:

“The Somali authorities have preserved macroeconomic stability and maintained the reform momentum, notwithstanding multiple shocks. In addition to the challenges from Covid-19 and the protracted elections process, food security and economic activity are under strain because of severe drought conditions, compounded by rising global food and energy prices. The authorities’ have made skillful efforts to navigate these challenges, supported by the international community, including the 2021 General SDR allocation. 

“The authorities maintain a steadfast commitment to the reform agenda under the ECF-supported program and the HIPC process, which is critical to build resilience, promote inclusive growth, and reduce poverty. The authorities’ ongoing efforts to strengthen domestic revenue mobilization and public financial management are commendable. Continued improvements in the institutional capacity of the Central Bank of Somalia are welcome. It will be important to continue to advance reforms to improve AML/CFT and governance. Sustained efforts are needed to finalize the HIPC completion point triggers and achieve debt relief agreements with all creditors.

“Support from development partners, both on financing and capacity development, is important 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,”read the statement by Antoinette Sayeh.

Table 1. Somalia: Selected Economic Indicators, 2019–2027