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July 24, 2019
Property and Investment

SOMALIA’S REFORM MOMENTUM: THE MAKING OF STABLE ECONOMY

International Monetary Fund (IMF) predicts Somalia’s economic growth pace could rise to 3% in 2019

Somalia is qualified for debt relief due to commitment t from the federal government, during a meeting between Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), and Hassan Ali Khaire, Prime Minister, Ms. Christine articulated t that with Somalia’s strong performance, together with support from international partners, will pave the way for Somalia to receive debt relief in the near future.

As Somalia implements its economic blueprints, what cannot be ignored are various investment opportunities, reform agenda, and capacity development need whereby technical assistance and training in key areas are the major focus. The Horn of Africa country’s real Growth Domestic Product was in 2018 projected at 3.1 percent and end-year inflation at 3.5 percent as per data by IMF. The exchange rate, for example, has remained stable. The same data also show that domestic revenue reached $161 million (which is 31 percent higher than the same period in 2017,) and the overall cash fiscal position was in surplus by $8 million.

To capture that growth and put things on the right path, Somalia authorities must weather the storm and push forward their reform momentum. This will make it possible for debts to be cleared, improve economic conditions, increase employment and make a significant reduction in poverty. At the same time, it will enhance debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative. Already the IMF is optimistic that experts say that further efforts are needed if things are to go according to plan. In fact, development and humanitarian partners like the European Union (EU), United Nations and World Bank, just to mention a few, are working with the authorities on enhancing the country’s resilience. The EU and the World Bank, for example, have been increasing grant revenues and providing further support for reforms and social transfers.

These advances will only pay off when policies are aligned with recommendations and staff-monitored program priorities, which are mainly to support economic growth, dealing with

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