São Paulo – Somalia, the Arab country in Africa, grew 3.4% in 2016 and is seen growing 2.5% this year, according to projections released by the International Monetary Fund (IMF) on Wednesday (8). The country’s Gross Domestic Product (GDP) is mostly underpinned by donations, remittances from Somali expatriates, and foreign direct investment. <\/p>\n
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According to the IMF, the slowdown this year will be primarily the result due to the effects of an ongoing drought on agriculture. That should be partly offset by construction, telecommunications and services. <\/p>\n
The IMF notes that Somalia, where a civil war lasting close to two decades ended in 2012, has made strides toward rebuilding its economy and normalizing its relations with international financial institutions. <\/p>\n
Social and economic conditions, however, remain difficult, with widespread poverty and over half the working-age population without jobs. The government struggles with weak institutional capacity, fragile security and complex clan politics which complicate economic reconstruction. <\/p>\n
On Wednesday, the Somali National Assembly elected former-prime minister Mohammed Abdullahi Farmaajo as president. The election was held in capital Mogadishu’s airport complex for security reasons. The result’s announcement triggered bomb attacks from opposing groups. <\/p>\n
The IMF restored its relations with Somalia in 2013, and is keeping track of the scenario, in addition to providing political counsel and technical assistance. An IMF monitoring program in the country began early last year and will run until April of this year. The goal is to help with reforms aimed at strengthening macroeconomic policy and administrative capacity. <\/p>\n
The actions already taken include approval of a approved a public financial management law, electronic payments of civil service and police wages, submission of financial statements to the auditor general and adoption of a draft National Development Plan (NDP). The Central Bank was reconstituted. The country’s fiscal position was strained in 2016, according to the IMF, with “budgetary grants and tax revenue falling short, as a result of reflecting delayed disbursements and weak tax collection performance. Meanwhile, expenditure on goods and services continued to increase, in part due to the election and security spending.”<\/p>\n
*Translated by Gabriel Pomerancblum<\/strong><\/p>\n