Somalia owes the International Monetary Fund (IMF) $328 million and no new loans will be given until some arrangement is agreed upon on how this debt is to be serviced, writes JOHN SAMBO.
Recently an IMF mission led by Rogerio Zandamela was in the country. He said last week, “The IMF is for now precluded from providing new loans to Somalia, pending clearance of the country’s arrears of about $328 million.
“But we can advise the authorities on appropriate macroeconomic policies, including in the context of a staff-monitored program, which is a kind of ‘shadow program’ involving a dialogue with the IMF on economic policies but which offers no financing.”
Zandamela said Somalia has much potential. “They have natural resources, including gas and petroleum, fisheries, and more. Proper management of these natural resources is vital to the country’s success.”
For two decades now, Somalia has been plagued by instability. Presently an African Union peacekeeping force (AMISOM), with troops from Burundi, Kenya and Uganda is helping to maintain security.
Somalia, along with Zimbabwe, are the two African countries that currently do not get any assistance from the multilateral institution that helps provide countries with balance of payments support.
However Zandamela said in a release that the situation in Somalia has improved., “Economic conditions improved rapidly in 2012-14, with real GDP rising by 3.7 percent during 2014.”
He said, “The recovery was led by growth in livestock and fisheries, and a very active private sector resurgence of the services industry, notably telecommunications, construction, and money transfer services, mainly associated with the return of diaspora Somalis.
“If security improvements continue, the entrepreneurial private sector will continue to be the most dynamic contributor to economic growth,” he said.
He said their Mission were able to compile and analyze core data to conduct the first ‘health check’ of the Somali economy in 26 years.
Source: East African Buisness Week