Hassan Sheikh: Somalia has transformed financial institutions

MOGADISHU, Somalia - The Federal Republic of Somalia has made tremendous changes in shaping financial institutions, President Hassan Sheikh Mohamud believes, noting significant milestones made over the years in transforming fiscal architecture in the country.

For a long period of time, Somalia has struggled in budget-making processes due to huge debts accrued over the years, with the country barely controlling recurrent and development expenditures. Somalia largely depends on international aid.

But President Hassan Sheikh Mohamud says the country has managed debt relief after managing to achieve the HIPC completion point, adding that in recent months, domestic revenues have also increased in the country.

“Despite multiple challenges, including security and climate-related disasters, Somalia has made significant progress in transforming its financial institutions which have led to debt relief and domestic revenue growth,” President Mohamud, while speaking at the AfDBAM2024 in Nairobi, Kenya.

During the Nairobi meeting, Somalia’s finance Minister Bihi Iman Igeh emphasized the importance of regional integration for Somalia’s economy. The integration, he said, would boost domestic production besides improving economic growth.

According to him, the government of Somalia anticipates significant economic benefits from the successful implementation of the Horn of Africa Cooperation Forum’s plans. The World Bank and the International Monetary Fund (IMF) are major global lenders of the country.

Somalia also targets to eliminate al-Shabaab militants who make up to $130 million annually, with $25 million going to the purchase of weapons. The al-Shabaab collects zakat from unsuspecting civilians and business people in Somalia.

Recently, President Hassan Sheikh ordered authorities to revoke the licenses of business people funding the militants whether willingly or through extortion. Somalia runs an annual budget of about $980 million annually with the international partners funding a huge chunk.

GAROWE ONLINE