The International Monetary Fund (IMF) said it has disbursed 8.9 million U.S. dollars to Somalia after reaching a staff-level agreement.
The IMF executive directors welcomed the Somali authorities’ commitment to economic reforms and the Heavily Indebted Poor Countries (HIPC) process, notwithstanding the challenges arising from an acute food crisis.
“They called for continued efforts by the authorities and sustained support from international partners to address the humanitarian crisis and reduce climate vulnerability to prevent food crises in the future,” the IMF said in a statement issued on Wednesday evening.
It lauded the continued reforms to strengthen the central bank’s governance and legal frameworks, including the implementation of IMF Safeguards recommendations and further bolstering the central bank’s financial regulation and supervision capacity.
“To promote inclusive growth, further efforts are needed to build resilience to climate shocks, advance implementation of the national development plan, and promote financial deepening, while maintaining fiscal sustainability,” the IMF said.
The lender praised the implementation of reforms to raise domestic revenues and called for further efforts on tax policy and administration reforms, including customs modernization and the new income tax law, the IMF said.
Somalia remains vulnerable to shocks, including repeated cycles of drought and floods, higher commodity prices, and the COVID-19 pandemic, which continue to test the resilience of the Somali population, according to the IMF.