Somalia economy to grow by unprecedented 3.7%, IMF confirms

MOGADISHU, Somalia - Despite many hindrances and prevailing circumstances, the economy of the Federal Republic of Somalia is set for an unprecedented growth of 3.7% in 2024, experts have projected, the highest figure in as many months, amid towering economic reforms.

Last year, Somalia's economy grew by 2.8% but the almost 1% increase this year is informed by massive economic reforms spearheaded by President Hassan Sheikh Mohamud, who is also actively fighting the Al-Shabaab menace in the Horn of Africa nation.

The International Monetary Fund (IMF) attributes the growth to strengthened agriculture, remittances, and investment in the country. Somalia's agricultural sector is booming after years of stagnation and adverse climate, which impacts negatively on the economy.

“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,” the statement read in par.

The lender added that Foreign direct investment is expected to trend upward following the debt relief to the tune of 4.5 billion in December. 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, the report said.

Laura Jaramillo, the IMF leader, confirmed that the country managed a successful review, which paved the way for the release of $100 million which will be injected to the economy of the country. Somalia runs close to a $1 billion budget annually.

The agreement is subject to approval by the IMF’s Executive Board. Board approval would enable access to SDR 7.5 million (about US$10 million), bringing total disbursements under the arrangement to about US$50 million.

President Hassan Sheikh Mohamud maintains that with success against Al-Shabaab, many investors will come back to the country, which has massive potential. The al-Shabaab has lost strategic sites in central and southern regions.

GAROWE ONLINE