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Somalia: Staff Report for the 2015 Article IV Consultation—Supplementary Information

Author(s):
International Monetary Fund. Middle East and Central Asia Dept.
Published Date:
July 2015
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1. Staff wishes to highlight developments since the staff report was circulated to the Executive Board on July 8, 2015. This information does not alter the thrust of the staff appraisal.

2. The authorities have produced a revised budget for 2015 that will avoid new arrears. On July 19, an extraordinary session of the Cabinet, chaired by the President, approved and sent to Parliament a revised budget for 2015. The budget revision contains significant measures to reduce spending and raise taxes. Our preliminary analysis is that these measures should yield $66 million on a full-year basis, equivalent to 33 percent of revised expenditure for 2015. The key measures are: (i) a sharp reduction in allowances for the military and police; (ii) cuts in spending on goods and services; (iii) a significant reduction in civil service salaries and allowances; and, (iv) substantial new taxes on allowances for parliamentarians. With these strengthening of revenue efforts, staff believes that the revised budget for 2015 could be implemented without incurring new arrears.

Table 2.Federal Budget, 2013–17(Millions of U.S. Dollars)
20132014201520162017
ActualBudgetActualBudgetProj.Rev. BudgetProj.Proj.
1. Revenues and grants110.8188.5145.3239.9183.7198.8238.3247.0
Revenue69.2115.384.3123.4100.4113.6133.4150.5
Tax revenue65.1108.073.8103.177.985.9108.7123.4
Tax on income, profit and capital gains0.75.11.14.62.15.15.06.0
Taxes on goods and services5.634.08.525.89.910.630.033.0
Trade taxes58.769.064.372.766.070.373.784.4
Non-tax revenue4.17.310.520.322.527.724.727.2
Grants 1/41.773.261.0116.583.385.2104.996.4
2. Total expenditure117.4216.2151.1239.9183.7198.8238.3247.0
Current117.4203.8150.9226.0169.7184.8219.3226.3
Wages and salaries50.494.377.2108.381.986.5108.3108.3
Goods and services56.068.857.682.758.468.982.784.3
Transfers to sub-national government 2/7.510.110.114.815.215.216.017.9
Contingency3.53.83.83.22.92.93.03.0
Repayment of arrears and advances0.026.82.217.011.311.39.312.8
Capital 2/0.012.40.213.913.913.919.020.6
3. Overall balance (1 - 2)−6.6−27.7−5.80.00.00.00.00.0
4. Liquidation of recovered government assets5.80.00.00.0
5. Accumulation of new arrears17.132.90.00.0
Financing (4 + 5)22.932.90.00.0
Memorandum items:
Repayment of arrears (from expenditure)0.026.82.217.011.311.39.312.8
Stock of domestic arrears (end of year)30.445.328.367.034.024.812.0
Sources: Somali authorities; and Fund staff estimates and projections.

Includes only donor support provided through local treasury systems.

Expenditures from hypothecated revenue in 2015.

Sources: Somali authorities; and Fund staff estimates and projections.

Includes only donor support provided through local treasury systems.

Expenditures from hypothecated revenue in 2015.

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