Somalia has been given go ahead to get new currency after the country fulfilled the conditions set by International Monetary Fund.
The International Financial Institution has said Somalia will need $41 million to start with the first phase of the currency printing process.
In an assessment letter, the agency lauded Somalia saying the country successfully completed the first and second Staff-Monitored Programmes (SMPs) which concluded in April.
“The Federal Government of Somalia (FGS) successfully completed the third Article IV Consultations with the IMF and first review under its second SMP (SMP II) in February 2018. The Somali authorities continue to demonstrate a strong commitment to implement critical reform measures in a very difficult environment,” reads the assessment letter in part.
Adding, “Performance under SMP II was satisfactory. However, despite the important reforms implemented since the first SMP I (May 2016-April 2017), significant challenges remain. Growth is too low to make a significant dent in Somalia’s widespread poverty, high youth unemployment, and large social needs.”
The assessment letter said Somali government was making progress in building institutions and improving economic performance.
“Budget execution, the treasury and cash management frameworks, and domestic revenue collection are improving. Efforts to lay the foundation for sustainable financial sector development and strengthen compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) standards are underway and preparatory work to launch a new national currency is well advanced,” the agency said.
Economic activity in Somalia is recovering from the effects of the drought in 2016-17, according to the agency.
“The drought hurt economic activity last year, but sustained international community support and remittances helped Somalia avoid a severe humanitarian crisis. For 2018, growth is projected to increase to 3.1 percent from an estimated 2.3 percent in 2017, and inflation is expected to ease to under 3 percent from around 5.2 percent in 2017. At the same time, reflecting a strong resolve to implement important fiscal measures under the SMP, the fiscal framework and fiscal performance improved in 2017 and during the first quarter of 2018,” the letter explained
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