IMF to release $9.4m to Somalia, warns of degraded economic growth

GOOBJOOG NEWS|WASHINGTON: The IMF has announced the disbursement of $9.4 million to Somalia following the completion of the fifth review of the Extended Credit Facility (ECF) arrangement.

The global lender said Somalia was now eligible for the additional funding bringing the total disbursement under the ECF and the Extended Fund Facility (EFF) to $386.1 million. The IMF noted that the funds will support the implementation of the authorities’ National Development Plan and anchor reforms between the Heavily Indebted Poor Countries (HIPC) Decision and Completion Points.

Despite significant challenges, including from the continued severe food crisis, Somalia has maintained strong reform momentum and program performance has been satisfactory, the IMF said.

The Breton Woods institution however noted Somalia’s economic growth is projected to slow by a quarter to 2.8 percent. Average inflation is expected to decline to 4.2 per cent in 2023 as commodity prices recede.

The IMF noted that erratic climatic conditions, security challenges, political risks, and policy slippages could delay Somalia’s efforts to reach the HIPC Completion Point.