Agriculture, remittances recovery to boost Somalia’s economy

[Deeq A.]

Supported by continued recovery in agriculture, remittances, and investment, Somalia economic growth in 2024 is expected to improve by around one percent compared to the previous year, according to the International Monetary Fund (IMF).

“Real GDP growth of Somalia is expected to at 3.7 percent in 2024, compared to an estimated 2.8 percent in 2023,” the IMF stated in a statement issued following the visit of its team, led by Laura Jaramillo, conducted discussions with the Somali authorities in Nairobi during February 26 to March 7, 2024.

“Livestock and crop exports are expected to recover following the resumption of rainfall. Remittance inflows are expected to improve in the context of moderating global inflation and an upgrade of the global growth outlook. Foreign direct investment is expected to trend upwards, following US$4.5 billion in debt relief obtained at the Completion Point under the Heavily Indebted Poor Countries (HIPC) Initiative in December 2023.”

Inflation is expected to decline to 4.8 percent in 2024 from 6.1 percent in 2023, reflecting better crop yields and lower commodity prices. Near-term risks include climate shocks, security risks in Somalia and the region, and lower global growth,” IMF said.

During the meeting, the IMF team has reached a staff-level agreement on the first review under the Extended Credit Facility (ECF) arrangement. “I am pleased to announce that the Somali authorities and the IMF team have reached a staff-level agreement on policies to complete the first review under the ECF arrangement approved in December 2023 for total access of SDR 75 million (about $100 million). The agreement is subject to approval by the IMF’s Executive Board. Board approval would enable access to SDR 7.5 million (about $10 million), bringing total disbursements under the arrangement to about $50 million,” said Ms. Jaramillo, in the statement.

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