<\/p>\n
An International Monetary Fund (IMF) team led by Ran Bi held discussions with Somali authorities in Nairobi from September 21 to October 1 as part of the 2026 Article IV consultation. \u201cSomalia is facing a confluence of significant global and domestic challenges, including sharp foreign-aid cuts since 2025, severe and recurrent climate shocks, spillovers from the Middle East war and evolving electoral dynamics,\u201d Bi said.<\/p>\n
<\/p>\n
Growth is projected to improve to 2.7% in 2027 and reach 4% over the medium term.<\/p>\n
<\/p>\n
Inflation is expected to rise to 6.5% in 2026 because of prolonged drought and disruptions to global trade. Remittances continue providing households with income and the economy with foreign exchange, but the external position remains vulnerable.<\/p>\n
<\/p>\n
The IMF said further aid reductions, renewed regional conflict and more severe climate shocks presented substantial risks. \u201cSustained donor support is critical, especially if downside risks materialise,\u201d Bi said.<\/p>\n
<\/p>\n
Somalia\u2019s budget deficit is projected at 0.9% of gross domestic product in 2026 before narrowing to 0.5% in 2027.<\/p>\n
<\/p>\n
Spending controls have contained the deficit, while domestically financed social expenditure has remained in line with expectations.<\/p>\n
<\/p>\n
The IMF called for stronger customs and income-tax enforcement, harmonised sales tax across the federal government and Member States and increased non-tax revenue.<\/p>\n
<\/p>\n
Revenue reforms should enable domestic income to cover government operating expenditure in the near term.<\/p>\n
<\/p>\n
Public financial-management priorities include stronger spending controls, improved oversight of risks associated with public-private partnerships and multi-year commitment controls.<\/p>\n
<\/p>\n
The Central Bank of Somalia is strengthening financial supervision, payment oversight and financial inclusion. The IMF said anti-money-laundering controls should also improve to protect financial integrity and support new correspondent banking relationships.<\/p>\n
<\/p>\n
Currency reform should proceed carefully once the necessary conditions are established.<\/p>\n
<\/p>\n
The IMF called for governance reforms, a better business environment, stronger trade integration and greater domestic processing to diversify exports.<\/p>\n
<\/p>\n
The Somali Development and Reconstruction Bank should also operate under sound governance while expanding finance for underserved productive sectors. \u201cSustained investment in education and climate resilience will also be critical,\u201d Bi said.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":43472,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-47308","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Somalia\u2019s economic growth is expected to slow to 2.3% in 2026 as foreign-aid cuts, severe climate shocks and Middle East conflict spillovers weaken activity.","published_date":"","news_description":"Somalia\u2019s economic growth is expected to slow to 2.3% in 2026 as foreign-aid cuts, severe climate shocks and Middle East conflict spillovers weaken activity.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/47308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/47308\/revisions"}],"predecessor-version":[{"id":47309,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/47308\/revisions\/47309"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/43472"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=47308"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=47308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}