São Paulo – The economy of Somalia is expected to grow by 2% this year, which is less than the 3.2% estimate for 2016, according to the International Monetary Fund (IMF). The IMF had a mission to the Arab country in North Africa from May 15 to 19, and released its conclusions this Monday (22).
A heavy drought which plagues the country since last year should keep getting in the way of Somali economic growth. Inflation in the country is expected to be higher than 3%. According to the IMF, the Somali government has taken steps to prevent further arrears in 2017.
An IMF press release quoted the Somalia mission chief Mohamed Elhage as listing the advances made by the Arab country since 2016. According to the Fund, by the end of last year, nearly all the structural benchmarks had been observed, and five out of six indicative targets had been met. The target on non-accumulation of new arrears was not met, and revenue performance was weak.
Long-term structural reforms are also underway. “For March 2017, all the quantitative targets and structural benchmarks were met. The authorities are encouraged to speed up and deepen agreed reforms,” the IMF said.
In order for Somalia to achieve its economic goals, the IMF mission advises that some other steps be taken, including increasing domestic revenue by broadening the tax base and enforcing efficient collection of taxes and customs, based on existing laws.
The fund also believes Somalia must continue to develop capacity and institutions, implement a sound fiscal framework, advance public financial management reforms, and jumpstart financial sector activity.
*Translated by Gabriel Pomerancblum