IMF to Help Somalia Rebuild Its Economy

IMF undertakes first health check on Somali economy in 22 years

Government priorities are to restore security, meet humanitarian needs, rebuild institutions, provide services

IMF to help in rebuilding central bank and fiscal institutions

After a two decade-long interruption in relations with Somalia, the IMF is striving to arrive at a better understanding of the country’s current economic and institutional realities.

In an interview with IMF Survey online, Ralph Chami, Division Chief, IMF’s Middle East Department, and Rogerio Zandamela, IMF Mission Chief for Somalia, discuss their recent fact-finding mission to Somalia and the country’s priorities as it emerges from a prolonged period of internal conflict.

IMF Survey: Why did the IMF resume relations with Somalia after a 22-year-interval?

Chami: Somalia has been in a state of war and internal strife for over 20 years. During most of that period, Somalia did not have a central government that enjoyed broad international recognition. Accordingly, the IMF did not have a counterpart government in Somalia with which it could engage.

The situation started to improve in the summer of 2012, when a new Federal Parliament was elected with broad representation from across Somalia. In turn, it elected President Hassan Sheikh Mohamud to head the new Federal Government of Somalia (FGS), and his government was quite successful in establishing relations with the international community.

In April 2013, the IMF recognized the FGS, paving the way for the resumption of relations. The decision is consistent with broad international support and recognition of the Federal Government, which allows the IMF to offer Somalia technical assistance and policy advice.

IMF Survey: What are Somalia’s immediate priorities?

Zandamela: Somalia is one of the poorest countries in the world. Its long history of internal wars has taken a toll on the country's infrastructure and human capital, with many Somalis having fled the country to live and study abroad. The economy—which primarily relies on subsistence agriculture and fishing—is still held back in its development by the fractured nature of the country and the poorly developed infrastructure.

Somalia's immediate priorities are to restore peace and security and address the vast needs of a population that has been battered by the long civil war. The country’s humanitarian needs are enormous. So, too, is the need to build public institutions to deliver economic and social...