The Executive Board of the International Monetary Fund (IMF) has hailed the Federal Government of Somalia’s continued efforts to broaden the tax base and strengthen tax administration which has led to increased domestic revenue.
The Board which has concluded the 2019 Article IV consultation with Somalia notes that efforts to broaden the tax base and strengthen tax administration have increased domestic revenues, supporting a small expansion in health and education spending.
They welcomed the cabinet approval of the airport‑fee contract and further progress on the renegotiation of the Mogadishu port contract.
The Directors however stressed that implementing a strong fiscal framework, supported by effective natural resource management and revenue‑sharing frameworks with the Federal Member States, will be critical to realizing Somalia’s longer‑term potential.
Despite stronger growth and the improving fiscal position, per capita incomes remain very low and more resources are needed to achieve greater economic resilience and reduce poverty. With debt at unsustainable levels (at about $4.7 billion or 100 percent of GDP in 2018, of which 96 percent is in arrears), Somalia will need the continued support of the international community to help meet much-needed humanitarian and development needs.