MOGADISHU, March 27 (Xinhua) -- The International Monetary Fund (IMF) said it has approved 395.5 million U.S. dollars credit facility to help finance various reforms in Somalia.
The IMF said the three-year financing package will support the implementation of the authorities' National Development Plan and anchor reforms between the heavily indebted poor countries (HIPC) Decision and Completion Points.
Kristalina Georgieva, IMF managing director, said Somalia has reached the HIPC Decision Point given the authorities' sustained commitment to reforming in a challenging political, security and climate environment.
"The authorities' strong policy commitment has helped strengthen public financial management and the financial sector, improve governance, and enhance macroeconomic stability," Georgieva said in a statement on Friday.
She said reforms will focus on continued strengthening of public finances to meet Somalia's development needs in a sustainable manner, deepening of central bank capacity, improvement of the business environment and governance, and enhancing statistics.
Reaching "Decision Point" means that Somalia's eligibility for debt relief is confirmed, and its relations with international financial institutions are fully normalized.
The economic program will support the authorities' implementation of their ambitious reform agenda and catalyze concessional donor financing.
"This will help the country implement its National Development Plan to build greater economic resilience, promote higher and more inclusive growth, and reduce poverty," IMF said.
Georgieva said the authorities' new three-year economic program is an ambitious and appropriate response to Somalia's macroeconomic challenges.
"Continued reform commitment, together with the necessary technical assistance, will be critical to achieving the program's objectives, as well as to secure higher and more inclusive growth," Georgieva said.
The lender said the authorities need to continue strengthening the cooperation between the federal government of Somalia and federal member states.
"The medium-term fiscal framework under the program appropriately balances the need to contain recurrent spending while channeling new resources toward Somalia's development plan," she added.
The IMF official said the central bank's efforts to strengthen its organizational capacity and enhance regulation and supervision will be critical for the robust and sustainable development of the financial sector.
