2017-02-21 Tue

Somalia has been facing the effects of the civil war for 30 years, due to which the country is facing an outstanding debt of $5.3 billion owed to the International Monetary Fund, the World Bank and the African Development Bank. The IMF says that creditors may forgive a portion of Somalia’s debt if necessary economic reforms are introduced, new currency notes are distributed and governance is improved. Al these efforts may lead to fresh funding.

Somalia is one of the last nations to qualify for debt relief under a World Bank and IMF initiative known as Heavily Indebted Poor Countries. It is the world’s fifth-poorest nation, according to the World Bank.

New Somali-shilling notes may be introduced this year with the dollar. 98 percent of the currency circulating in the country is fake. The rest, issued way back in the early 1900s are in extremely poor condition.

Small denominations will be introduced to set monetary policy. Funds and financing will be agreed once the government decides whether it wants a floating- or fixed-rate currency regime. Regulation and supervision of the financial sector for new investors are being considered.

Besides that, Somalia is the world’s most corrupt nation as per some reports. Improving governance should also be on priority.