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· The programs of the International Monetary Fund (IMF) in Somalia could stop in three months in case of any delay in the elections, according to some wire agency reports
· According to an agreement between the Somali leaders, the parliament elections should have been completed on February 25, allowing then the election of a president
· But it is delayed and more than 100 seats have yet to be filled in Parliament
· The IMF is due to conclude an evaluation of its programs in mid-May
The programs of the International Monetary Fund (IMF) in Somalia could stop in three months in case of any delay in the elections, according to some wire agency reports.
According to an agreement between the Somali leaders, the parliament elections should have been completed on February 25, allowing then the election of a president. But it is delayed and more than 100 seats have yet to be filled in Parliament. The IMF is due to conclude an evaluation of its programs in mid-May.
The newly elected government by that time would have taken many key decisions on economic reforms. Any delay in taking decisions would affect the budgetary aid received by Somalia from partners but also the ongoing process of reducing its external debt. The federal government has a deficit of US $10 million each month to pay for priority expenses, such as salaries.
Somalia is one of the world’s poorest countries. Nearly 70 percent of the population lives on less than US$1.90 a day. Somalia is struggling to recover from decades of civil war and insurgency by the Shebab Islamists. The country’s economy is vulnerable to the cumulative effects of droughts, locust invasions and Covid-19. Over 200,000 poor households receive monthly assistance through a government program supported by the World Bank.
The IMF predicts that the country’s growth would reach 2% by 2021 riding on the back of strong household consumption. Remittances from expatriates, particularly from the Gulf countries, is a main source of income. The country exports livestock, particularly to the Gulf countries. Remittances sent by the Somali diaspora aggregated to more than US$2 billion in 2021, equivalent to 28% of GDP, according to the institution. The IMF’s forecast is that the growth for 2022 would be 3.2%
