According to Somalia’s Minister of Finance Abdirahman Beileh, the two-week process to review the Somalian economic reform will delve into all aspects of economic and financial policy.
In a tweet on 18 February, the minister said: “Raising domestic revenue is key to Somalia’s economic reforms. Our taxpayers are fundamental to increasing revenue.”
Raising domestic revenue is key to #Somalia‘s economic reforms. Our tax payers are fundamental to increasing revenue. We are determined to grow the tax base further, collect taxes more effectively & be transparent in all @MoF_Somalia oeprations to increase public confidence. https://t.co/VIeJHIPmd2
— Dr Abdirahman Beileh (@DrBeileh) February 18, 2022
The IMF‘s programme in Somalia is due for review in mid-May, but election delays mean a new administration may not be ready to back planned reforms in time, said Laura Jaramillo Mayor, the fund’s chief of mission for the country.
“That review of the IMF support programme for Somalia must be completed by May 17, 2022, if it is not completed by that date, the program automatically ends,” he told AFP in an interview.
In the green?
Somalia has made significant progress in recent years, clearing its arrears to the African Development Bank (AfDB), the International Monetary Fund and the International Development Association, and reducing its external debt to $3.9bn from $5.3bn.
However, the country’s elections remain over a year overdue, with a deadline for voting in lower parliament this Friday. Ongoing civil unrest and piracy issues have contributed to instability, and the country continues to have a poverty rate of 73%, with nearly 70% of its population living on less than $1.90 a day.
This year, the EU has allocated €41m ($36.1m) in funding for humanitarian projects in Somalia.
Oil contract fight?
The race to stabilise the economy has meant a search for new sources of finance.
President Mohamed Abdullahi Farmaajo’s office stated that it will nullify a recently announced deal with US company Coastline Exploration for seven production-sharing contracts relating to offshore oil blocs.
In a tweet, the President said: “The deal contravenes Presidential Decree 7/8/2021 which bans the inking of deals during elections so as to protect public resources from exploitation during elections.” It came after public backlash against the deal.
“After a rigorous negotiating process, we are delighted to have signed these inaugural PSAs with the Somali Government”, Coastline’s Chairman Jake UIrich told reporters.
“The way is now open for other oil and gas companies to join us in our quest for commercial discoveries through the current licensing round and, also through direct negotiations with the Somali oil and gas authorities.”