Somalia may be eligible to tap financing from the International Monetary Fund and other multilateral lenders if it maintains a reform program intended to help rebuild the country’s war-shattered economy, the IMF country head said.
Prospects for peace after more than two decades of conflict have been boosted after Somalis agreed to elect a new administration on Oct 30, Samba Thiam said in an e-mailed response to questions Aug 9.
The IMF expects the Horn of Africa nation to open up to foreign capital as the government continues to improve its management of the economy, he said.
| This will allow both Somalis and foreigners with the right connections to wet their beaks. The kinds of connections the IMF excels at... |
“Progress has been made already in the areas of investment law, procurement, contract concessions, public financial management and anti-money laundering,” Mr Thiam said.
“If the current and subsequent programs are successfully implemented, in the future Somalia may indeed access IMF financing.”
Somalia’s US$6 billion economy has been devastated by civil war that began in 1991 and a subsequent Islamist-militant insurgency that has destroyed much of the country’s political and economic institutions, according to the World Bank. Income per capita is estimated at US$435, making Somalia the fifth-poorest country in the world.
The IMF and World Bank are supporting a raft of reforms that are making Somalia’s business sector “more attractive,” Mr Thiam said. Donors have provided US$10 million to develop local skills, he said.
The IMF has also backed a plan by the Central Bank of Somalia to print its own currency by 2017, Mr Thiam said. The bank is in the final phase of discussions with donors to secure funding for currency reforms, Governor Bashir Issa Ali said in a phone interview from the capital, Mogadishu.
Somalia’s economy will probably grow 3.7 per cent this year and next, according to IMF estimates.
| That will make per capita income about $470 a year. But some folks with the right connections will do far better than that, which is the whole point... |
Companies including Royal Dutch Shell Plc, Exxon Mobil Corp, and BP Plc are in talks about returning to the country, the presidency said in August 2014.
Institutions and effective legislation, along with the ability to negotiate contracts with oil and gas investors should be in place before any permits are issued, Mr Thiam said. 
|
