Economic activity has picked up in recent months, supported by a rebound in agriculture, though still affected by the lingering effects of two years of drought and recent severe flooding. The security situation remains challenging, with the government scaling up its military actions against the Al-Shabab terrorist group, amid the planned withdrawal of the African Union Transition Mission in Somalia (ATMIS) by end-December 2024. Despite these significant challenges, the authorities remain committed to the reform effort, leveraging the benefits of the HIPC Completion Point achieved in December 2023.
- Format
- Paper
- Frequency
- regular
- ISBN
- 9798400277993
- ISSN
- 1934-7685
- Pages
- 121
- Published in
- United States of America
- Series
- Country Report No. 2024/158
- StockNumber
- 1SOMEA2024001
Table of Contents
- Context 9
- RECENT ECONOMIC DEVELOPMENTS 11
- PROGRAM PERFORMANCE 13
- OUTLOOK AND RISKS 13
- PROGRAM AND POLICY DISCUSSIONS 14
- A. Fiscal Policy 14
- B. Monetary and Financial Policy 16
- C. Governance, Inclusive Growth, and Resilience 18
- FINANCING AND PROGRAM MODALITIES 19
- staff appraisal 21
- A. Context 48
- B. Key Challenges that Affect the Design of the Monetary and Exchange Rate Policy Frameworks for Somalia 49
- C. Proposal for a Currency Board Arrangement for Somalia 50
- D. Key Features of a Currency Board Arrangement (CBA) 51
- E. Why is the CBA a Good Fit for Somalia? 52
- F. What is Needed for Somalia to be Able to Implement a CBA Successfully, and What Capacity Needs to be Developed? 53
- G. What are the Main Risks around a CBA in Somalia? 55
- Background and Program Performance 65
- Outlook and Risks 72
- Economic and Financial Policies 72
- Fiscal Policy and Reforms 73
- Monetary and Financial Sector Reforms 76
- Policies for Improving Economic Growth, Governance, Social Inclusion, and Statistics 77
- Program Monitoring and Access 77
- Quantitative Targets 81
- Definitions and Computation 82
- a. Article 5 (3): Within 7 days of granting an exemption the Minister shall notify the Council of Ministers and the Auditor General of the tax exemptions and the reasons for the exemptions. 83
- b. Article 5 (4): The Minister shall submit the tax exemptions approved to both Houses of Parliament on or before March 31st, June 30th, September 30th, and December 31st of each financial year. 83
- c. Article 5 (5): The content of the reports should show at the micro level the individual to whom the tax exemption was granted; the reasons for the exemptions; the total of taxes due to the Government but not paid; and the benefits to the Government... 83
- d. Article 18 (1)(f): The proposed Budget Appropriation Bill submitted by the Minister to both Houses of the Federal Parliament of Somalia should contain the annual tax exemption report. 83
- a. Allotment: An allotment refers to a ceiling on the amount of warrants to be requested by MDAs during a specific time period. An allotment is issued by the MoF within available funds for the period covered. Also referred to in some texts as “apporti... 83
- b. Warrant: A warrant refers to a ceiling on the amount of commitments to be made by MDAs during a specific time period. A warrant is issued by the MoF on request from an MDA within the amount of available allotment. Once approved, the warrant reduc... 83
- c. Commitment: A commitment refers to a contract or other form of legally binding agreements to make payments. It includes agreements to make payments in exchange for future delivery of goods or services and agreements of a continuing nature, includin... 83
- a. Gross foreign assets are defined as 87
- b. Gross foreign liabilities are defined as 87
- a. If the CBS transfers distributable earnings to the government as per the Central Bank of Somalia Act. 87
- b. If the CBS provides the MoF with temporary liquidity advances to finance delays or shortfalls in budget support grants relative to the budget estimate. In line with the CBS Law, the total amount outstanding at any time of CBS advances shall not exc... 87
- Program Monitoring 88
- Somalia Press Release First Review May 2024_COM.pdf -1
- IMF Executive Board Concludes the First Review of the Extended Credit Facility for Somalia 3
- FOR IMMEDIATE RELEASE 3
- Somalia - 2024 - DSA First Review Under ECF to Board.pdf -1
- Public Debt Coverage 95
- Background on Debt 96
- background on macroECONOMIC forecasts 97
- Country classification and determination of scenario stress tests 102
- External Debt Sustainability 102
- Public Debt Sustainability 103
- risk rating and vulnerabilities 103
- Authorities’ views 104
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