Somalia’s economy has been seriously weakened by the devastating civil war. In this part, agriculture is considered as the most important sector for livelihood as the livestocks account to 40% of the GDP and 65% of export earnings. In this area, a large portion of the population is occupied by the nomads and semi nomads. They directly depend on the livestocks growing in this land. Well, the small industrial sectors, based on the processing of agricultural products have been shut down due to the civil strife. However, there is a constant intervention in Somalia economy by the Italian Fascists, Somalia Marxists and International Monetary Fund (IMF) economists for restoring the economy.


The IMF has set three agendas on the list in order to rebuild the Somali economy. At last after 22 years, IMF extends its support to check the Somali economy. As a matter of fact, the focus is on restoring security and to meet humanitarian needs, establish institutions and offer services to the citizens. So, IMF is trying to establish central bank as well as fiscal institutions in Somalia.


Recently, the Federal Government of the Somalia received international recognition. So, it’s easier for the IMF to provide technical support as well as offer policy advice to war devastated east African Nation.


After two decades, the IMF is trying to bridge the gap with Somalia and it is attempting to understand country’s current economic and institutional facts. In fact, Somalia has been severely affected with constant internal conflict over 20 years. During this phase, the Somalia didn’t have a central government that got international recognition. Previously, IMF didn’t have a counter government with which it managed to coordinate.


In 2012, the situation started improving with the election of the new Federal Parliament along with broad representation from all across Somalia. In this situation, President Hassan Sheikh Mahmoud elected as the head of the new Federal Government of Somalia. He and his team governed the nation successfully and managed to build friendly relation with the international community. The Federal government allowed the IMF to provide Somalia technical help as well as advices on implementation of different policies.


As a matter of fact, Somalia is considered as one of the poorest and least developed country in the world. Its horrific past in relation to the civil wars and internal conflicts took a toll on the country’s infrastructure as well as human capital. In this part, most of the Somalis escaped to other countries for better education and life. Well, the economy of this country is largely based on agriculture and fishing. This part of the economy is sluggish due to fractured nature of the country and has suffered setback in terms of infrastructure development.


However, the Somalia’s federal government is focusing to restore peace and security of the country that addresses immediate need of the population that has been trampled by the long civil war. Therefore, the Federal government requires cooperation from the International partners restore peace and stability in the country with the help humanitarian aid.


In collaboration of Federal Government, the IMF is planning to build capacity in the key economic agencies like the ministry of finance, the central bank, and the statistics office. The Ministry of Finance managed to raise capacity as well as control public finances. The central bank staffs will be assisted by the IMF for developing the ability to license and monitor commercial banks. In addition to this, the IMF will also assist to establish functioning domestic and international payment system. They may prioritize in restoring systems to collect and process vital economic data in the areas of national accounts and price statistics, money and banking along with the public finance.
But the IMF has avoided providing new loans to Somalia and extending its support to clear the pending liabilities of the country to IMF. In this situation, the IMF is only concentrating on providing technical assistance and advice the authorities on appropriate macroeconomic policies. A sound economic policy is being established for the betterment of the country.


By Savion Sage



  1. I think some people are a bit too optimistic about the IMF. It has had a few success stories, Turkey for example could be one. However its failures by far outnumber them. Somalia in the 80's is one, It had much more of a devastating impact on the economy then the civil war.

  2. It depends on the people receiving the loans, stupid people will always produce stupid results as it happend to Zoomalis before.

    They cannot restart the agricultural industry because Zoomalis have gained land through ill means, so much of this agricultural land is still faught over and disputed rather than being productive. The fishery industry needs well trained native mechanised industry and logistics for warehousing and transportations with alot of investmen and effort. But the westerners wouldn't allow such native industry because they want to use Zoomalis as labourers only, so they would own the companies and ship the products to western markets. That even happened under the old Siyadist regime, with Italians having exclusive rights to steal everything from the country, even bananas.

  3. The Italians and Somalians know each other. How they would deal with the IMF and the W.Bank
    is upto the SFG in power.