According to the International Monetary Fund IMF report, Somalia’s economy is recovering, and the GDP growth is projected at 3.1 percent and end-year inflation at 3.5 percent.
However, further efforts are needed to secure economic resilience and reduce poverty in the horn of the Africa nation.
The report released on Tuesday dubbed “IMF Management of the First Review under the Staff-Monitored Program with Somalia” said that since 2017, growth has rebounded, inflation has slowed, and the trade deficit has narrowed.
“For 2018, The exchange rate has remained stable. But further efforts are needed to improve economic conditions, increase employment and make a significant reduction in poverty,” IMF said in an online report.
The international financial institution has called upon the development and humanitarian partners to closely work with the Somali authorities on enhancing the country’s resilience.
The IMF also praised efforts by the federal government to improve domestic revenue mobilization saying an increase of 31 percent revenue collection has been registered since last year.
Data through November 2018 show that domestic revenue reached $161 million (31 percent higher than the same period in 2017), and the overall cash fiscal position was in surplus by $8 million. New budget support grants from the EU and the World Bank are increasing grant revenues and providing further support for reforms and social transfers. Staff commends the authorities for their concerted efforts to improve domestic revenue mobilization,” IMF said.
Washington based bank also called upon the government of Somalia to embark on the reforming and developing the financial sector mainly in the central bank and mobile money sector as soon as possible to curb money laundering crimes that impact on the downfall of the recuperating economy.
“Staff urges the rapid implementation of planned changes to the organizational and governance structure of the Central Bank of Somalia. Staff urges the authorities to bring the mobile money sector under its supervisory and regulatory umbrella as soon as possible. Finally, compliance with anti‑money laundering and combatting the financing of terrorism (AML/CFT) regulations must be improved, and identified gaps in the framework addressed,” IMF added.