The International Monetary Fund said Friday it would provide an oversight program for Somalia to help bolster the recovery of the country’s war-devastated economy.
“Somalia is recovering slowly from nearly 25 years of civil war. Weak institutional capacity, complex clan politics, and a challenging security situation have complicated the country’s economic reconstruction,” the IMF said in a statement.
The IMF said it agreed to a request from the Somali authorities for a staff-monitored program that will include helping the impoverished east African country restore macroeconomic stability, rebuild institutions and improve governance and economic statistics.
“Given Somalia’s weak administrative capacity, technical assistance is an integral part” of the program, it said.
Among the program’s objectives will be to try and keep the government’s budget balanced without piling up unpaid domestic obligations. The country already has a large level of unpaid external debt, including to the IMF.
Other areas include currency reform and a stronger framework to fight money laundering and the financing of terrorism.
The program, which will run through April 2017, aims at setting up a track record on economic management and reform implementation, along with a strategy for clearing out the country’s debt.
Somalia is ineligible to receive any new IMF financial assistance given its $328 million in arrears to the Washington-based institution.
“Continued support from creditors and donors will remain critical for a full normalization and resumption of financial assistance from the IMF,” the Fund said.
The IMF recognized the current Somali government three years ago and concluded its first annual review of the country in more than 26 years in 2015.
Somalia sank into a devastating civil war in 1991 when warlords ousted president Mohamed Siad Barre, plunging the country into years of chaos.
The security situation remains troubled, largely due to the Shebab, radical Islamists linked to Al-Qaeda who are fighting to overthrow the government.