Somalia: New IMF program to increase donor confidence

MOGADISHU, Somalia-International Monetary Fund (IMF) has introduced a new program aimed at enhancing transparency and accountability with Somalia’s Federal Government in a mission to Kenyan capital, Nairobi, Garowe Online reports.

Mission Chief Mr. Rogerio Zandamela said, IMF Staff have reached agreement on a 12-month Staff-Monitored Program which will be launched in May this year with Somalia as part of supports to package of reforms by authorities.

In December, Somali President Hassan Sheikh Mohamud blamed international donors for failing to deliver on billions promised in reconstruction aid, warning that trust in foreign intermediaries could scupper priorities of state institutions.

“Despite the difficult socioeconomic conditions, recent efforts by the Federal Government of Somalia (FGS) are bearing fruit,” said Mr. Zandamela.

While acknowledging challenges posed by insecurity and war-induced destruction to revenue collection exercises and delivery of services, IMF unveiled that the economic growth in 2015 was estimated at 3.7 pc and inflation at 1 pc.

“This is a significant milestone for Somalia, marking the move toward normalizing relations with International Financial Institutions. The program will focus on policies to improve governance and fiscal management, strengthen institutions, foster financial sector development, and fill considerable data gaps,” added the statement.

The new program envisages reforms to boost domestic revenue and improve budgeting process of Somali government.

“It emphasizes the implementation of a recently-adopted arrears management strategy, and the continuation of public financial management reforms to enhance the transparency of, and accountability for, government operations.”

Analysts say, the scheme--though doesn’t include direct financial aid--could pave the way for future IMF load program, and revamped pledges by donors whose confidence was dented by serious graft allegations that implicated senior government officials.

GAROWEONLINE