Somalia Reaches Milestone with First IMF Review in Decades

SUMMARY

Somalia should focus on strengthening the key building blocks for stability and growth as it recovers from more than two decades of civil war, the IMF says in its first review of the nation’s economy in a generation.

 
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  • War-torn country begins rebuilding economy and alleviating poverty
  • Building institutions, fostering strong governance are key priorities
  • International community will continue to support with financial assistance, capacity building
  • In its first regular “health check” of the economy in over 25 years, the IMF noted that the country had made significant progress since it resumed relations with the international community. But Somalia’s situation remains very fragile, and international support will be vital to rebuild institutions and restore normalcy, the report says.

    In the following interview, IMF mission chief Rogerio Zandamela discusses the incremental steps Somalia has begun to take toward economic recovery from conflict.

    IMF Survey: Could you describe Somalia’s progress since the restoration of its relations with the international community in 2013?

    Zandamela: When our team first began working on Somalia in June 2013 after the protracted civil war, we had practically no data about the economy. It took us almost six months to collect some preliminary information to work with, and we then decided to focus on the budget of the federal government. Gradually, we were able to get a better sense of the country’s GDP and other basic macroeconomic data and information.

    The country has made incredible progress. We were able to compile and analyze core data to conduct our first “health check” of the Somali economy in 26 years. The IMF has been helping the Somalis set up systems for improving central bank governance, central bank accounting and financial reporting, and the supervision of financial institutions. We’ve also been assisting them with budget preparation, formulating fiscal policy, and developing statistical systems.

    The Fund has not been alone in helping Somalia—the African Development Bank, the World Bank, and bilateral donors such as the European Union, Kenya, Norway, Turkey, the United Kingdom, and the United States are extremely active. Given the magnitude of the task in Somalia, no one institution can be expected to manage it singlehandedly.

    IMF Survey: Can you paint a picture of the Somali economy today?

    Zandamela: Humanitarian and social conditions in Somalia are among the most daunting in the world. Close to 4 million people—nearly a third of the population—are in need of food assistance. Infant mortality is more than one in ten; and life expectancy is about 51 years. Moreover, according to the UNDP, an estimated 73...

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