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International Monetary Fund. Middle East and Central Asia Dept.
The authorities are requesting additional interim HIPC assistance from the Fund in the amount of SDR 680,000 (Appendix I) to cover the period March 25, 2021- March 24, 2022. The interim HIPC assistance will be applied to cover 100 percent of eligible debt service to the IMF falling due over the 12 months starting from March 25, 2021.
International Monetary Fund. Middle East and Central Asia Dept.
Soon after reaching the HIPC Decision Point and embarking on a new IMFsupported program aimed at supporting the implementation of the authorities’ National Development Plan and lifting growth, Somalia was hit by a triple shock of flooding, desert locusts, and, importantly, the coronavirus pandemic. Prompt action by the authorities and support from the international community has helped mitigate the impact on peoples’ lives and livelihoods, however, these shocks have had a significant impact on economic activity, exports, and domestic fiscal revenues.
Carine Meyimdjui
Using a panel of 101 low- and middle-income countries with data covering the period 1980-2012, this paper applies various econometric approaches that deal with endogeneity issues to assess the impact of food price shocks on socio-political instability once fiscal policy and remittances have been accounted for. It focuses on import prices to reflect the vulnerability of importer countries / net-buyer households to food price shocks. The paper finds that import food price shocks strongly increase the likelihood of socio-political instability. This effect is greater in countries with lower levels of private credit and income per capita. On the other hand, while remittances seem to dampen the adverse effect of import food price shocks on socio-political instability in almost all countries, the mitigating role of fiscal policy is significant only in countries with low-levels of private credit.
International Monetary Fund
The COVID-19 pandemic has caused a uniquely severe synchronized shock across the global economy, in turn leading numerous member countries to request substantial financial assistance from the Fund. The Executive Board responded to members’ needs by increasing the access limits under the Fund’s emergency financing instruments by 50 percent of quota for a period of 6 months (until October 5, 2020), subject to a possible extension by the Executive Board.
International Monetary Fund. Middle East and Central Asia Dept.
This paper presents an assessment of Somalia’s eligibility for assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The macroeconomic framework reflects the policy framework underlying the proposed three-year Fund-supported program. The debt relief analysis (DRA) remains largely unchanged, but some of the underlying debt data has been updated to reflect new information from creditors. In addition, this paper presents an assessment of debt management capacity in Somalia and a full Debt Sustainability Analysis under the Debt Sustainability Framework for Low-Income Countries. The DRA reveals that, after traditional debt relief mechanisms are applied, Somalia’s debt burden expressed as the net present value of debt-to-exports ratio is 344.2 percent at the end of December 2018—significantly above the HIPC Initiative threshold. Despite the challenging environment, progress on reform and policy implementation has been good and sustained reforms have translated into economic results. In addition to the coordinated support from the World Bank and the IMF, reforms have been supported by other development partners.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Somalia’s Second Review Under the Staff-Monitored Program and Request for Three-Year Arrangements Under the Extended Credit and the Extended Fund Facility. The three-year financing package will support the implementation of the authorities’ National Development Plan and anchor reforms between the heavily indebted poor countries Decision and Completion Points. Reforms will focus on a continued strengthening of public finances to meet Somalia’s development needs in a sustainable manner; a deepening of central bank capacity; improvement of the business environment and governance; and enhancing statistics. Risks to the program and outlook remain elevated, although there is also upside potential. The immediate political risks concern the upcoming elections, while frequent climate shocks continue to contribute to agricultural loss and human displacement. On the upside, greater-than-expected impact from reforms under the program and additional development financing, together with the development of new industries, could lead to higher and more inclusive growth than the baseline.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Somalia’s First Review Under the Staff-Monitored Program (SMP). The report focuses on further efforts to mobilize revenues, including across the Federal Member States, strengthen public financial management, enhance financial sector stability, and strengthen compliance with the framework for anti-money laundering/ combatting the financing of terrorism. The authorities’ strong commitment and program implementation has strengthened capacity despite a challenging environment. Underlying economic growth remains stable, supported by donor support and the ambitious and broad reform agenda. However, insecurity and recurring drought represent key risks to the outlook, and, despite progress, growth is insufficient to substantially reduce poverty. Financial stability reforms are deepening. New mobile money regulations are welcome, and implementation will be key for supporting financial stability. Continued efforts to expand the operational and organizational capacity of the Central Bank of Somalia will underpin further development of the financial sector more broadly. Reducing Somalia’s debt to sustainable levels under the Heavily Indebted Poor Countries Initiative and normalizing relations with international financial institutions will unlock access to additional financial resources to address Somalia’s development needs.
International Monetary Fund and World Bank
This report reviews developments in the implementation of the Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI). It also provides updates on debt service and poverty-reducing expenditure by beneficiary countries, as well as on the cost of debt relief, creditor participation rates, and litigation against HIPCs.