Debt Relief in sight, courtesy of IMF

The International Monetary Fund (IMF) will offer Somalia technical support and advice, which can be seen as a first step in efforts to make debt relief possible for the country emerging from two decades of civil conflict, the central bank governor said yesterday. The IMF officially recognised the Somali government in April, ending a 22-year hiatus during which the African nation was mired in grinding poverty, militancy and maritime piracy, without a functioning central government. Technical help will focus on the basics: Helping the authorities manage a budget, licence commercial banks and compile rudimentary economic data in a country consistently ranked among the world’s most corrupt. The Central Bank of Somalia this month published its first annual report since civil war erupted in 1991, putting the total debt stock at $3.2bn. To win debt relief offered to poor nations, it has to draw up a financial management plan. “It’s a programme for the IMF to say that … their budget is reasonable, their revenue can support the budget, their liquidity is there and their staff and institutions are becoming stronger,” the bank’s governor, Abdusalam Omer, said after a week of talks with IMF officials in Nairobi. Discussion of monetary policy, fiscal targets and debt relief points to recovery in a nation where two years ago the capital was a frontline in the battle between Islamist militants and African peacekeepers. But a deadly rebel attack on the United Nations in the capital Mogadishu last week underscored how delicate security gains are. Some see debt relief as vital to ensuring cash-starved Somalia does not slide back into anarchy, but few are ready to entrust the government with direct aid.

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