IMF upbeat on Somalia’s currency reform process

International Monetary Fund Managing Director Christine Lagarde speaks at the annual Michel Camdessus Central Banking Lecture at the IMF Headquarers September 18, 2017 at the IMF Headquarters In Washington, DC. IMF Photo/Stephen Jaffe

The International Monetary Fund (IMF) has hailed Somalia’s track record in meeting set targets under the Staff Monitored Programme ‘despite difficult political and economic environment’.

The IMF staff which concluded its five days engagement with Somali authorities this past week sounded upbeat on the government’s preparation towards launching a new currency.

“The Somali authorities are building a good track record of policy and reform implementation. Despite a difficult economic and political environment, the Federal Government of Somalia has successfully completed two consecutive 12-month Staff-Monitored Programs (SMPs) since May 2016,” head of the IMF team Mohamed Elhage said in a statement.

The IMF approved a third 12 month SMP June this year stretching from May 2018 to April 2019. SMP is an informal and flexible instrument for dialogue between the IMF staff and a member country on its economic policies. The programme monitors a country’s target and policies.

“Performance under SMP III is satisfactory. The three end-June structural benchmarks and all six indicative targets were met. In addition, the September benchmarks are well on track and progress has been made to advance on the December 2018 and March 2019 benchmarks, the global lender said.

The lender however called for austerity measures to curb public spending owing to ‘uncertainties about grant disbursements’. It called for increased revenue collection and reiterated its earlier advice on the government to ensure grant projections are consistent with confirmed pledged grants.

The IMF gave Somalia a nod in May to source for $41 million to roll out the first phase of currency reform which involves issuance and distribution of new currency notes.