Tuesday April 24, 2018, Prime Minister, Hassan Ali Khaire said that international partners have agreed that Somalia had made visible changes in public finance management, good governance and economic recovery.
The PM’s comments came after a recent high-level roundtable in Washington attended by Somalia’s Finance Minister, Abdirahman Beileh, lauded the developments made by Somalia in the financial sector.
PM Khaire mentioned that officials from the International Monetary Fund (IMF) and the World Bank finally agreed to support Somalia resume printing its currency.
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“One year ago, we promised to improve the country’s economic situation, a few days ago our finance minister has attended a meeting in Washington, where it was acknowledged that the Somali government had made a big achievement in the financial and economic reform agenda. Thus, participants agreed to help Somalia resume its banknotes for the first time since the government collapsed in 1991,” he said.
He added that some European nations have also pledged to begin providing direct financial support to the federal government channelling the financial aid via the Central Bank.
He noted that the debt clearance path is now open for the federal government.
According to the IMF, Somalia’s external debt stands at about $5.2 billion. Somalia has not made a service or amortization payment on the debt since civil war broke out nearly three decades ago. As a result, the majority of the debt is interest and penalties accrued since the collapse of the central government.
Much of the principal debt dates back to the Cold War when the world’s superpowers battled for supremacy in Somalia and the horn of Africa. Almost all of Somalia’s debt burden is accounted for by arrears on credit advanced in the early 1980’s, well before most of Somalia’s population – where 60% of the population is estimated to be under the age of 25 – was born.
Somalia’s government has undergone an aggressive campaign to access debt relief which includes adherence to an IMF staff-monitored programme.
The IMF estimates that economic growth is set to quicken to 2.5 percent in 2018 from 1.8 percent in 2017.
Earlier this year it was announced by the Ministry of Finance that $42.5 million was raised in domestic revenue during the first quarter of 2018, a fiscal milestone since the collapse of the central government in 1991.