Somalia: Fifth Review Under the Extended Credit Facility Arrangement, Requests for Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria and Indicative Target, and Interim Assistance-Press Release; and Staff Report

This paper presents Somalia’s Fifth Review under the Extended Credit Facility (ECF) Arrangement, Requests for Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria and Indicative Target, and Interim Assistance. Despite significant challenges, including from the continued severe food crisis, Somalia has maintained strong reform momentum and program performance has been satisfactory. The authorities’ steady progress under the Heavily Indebted Poor Countries (HIPC) process is important to lay the ground for achieving the Completion Point in late 2023. Continued support from international partners is imperative to support the authorities’ policy efforts. The authorities are committed to advancing fiscal and institutional reforms, and normalizing relations with all external creditors. In particular, sustained efforts are needed to strengthen domestic revenue mobilization to make room for priority spending, while containing discretionary expenditure pressures. Timely financing and capacity development support from development partners is essential for the successful implementation of the authorities’ reform strategy. Contributions from Somalia’s partners to the Somalia Country Fund are critical to ensure smooth delivery of IMF technical assistance to support the goals of the ECF-supported program and the HIPC Initiative.