The International Monetary Fund has approved an additional $40m in financing for Somalia after completing the fourth review of the country’s Extended Credit Facility (ECF).
Somalia is implementing reforms under the IMF’s Extended Credit Facility (ECF), a zero-interest loan program that supports low-income countries facing long-term financial challenges.
The facility helps Somalia stabilise its economy, strengthen public finances, and build institutions needed for sustainable growth.
The global lender praised authorities for maintaining reform momentum despite a sharp drop in foreign aid and worsening climate pressures.
The decision by the IMF executive board raises Somalia’s total access under the programme to about $140m and triggers an immediate disbursement of roughly $30m in budget support.
The ECF, first approved in December 2023, underpins Somalia’s post-debt relief reforms aimed at strengthening economic institutions and supporting the government’s long-term National Transformation Plan and Centennial Vision 2060.
In a statement on Tuesday, Nigel Clarke, the IMF’s deputy managing director and chair, said Somali authorities had shown “steadfast reform implementation” through 2025.
He warned, however, that persistent aid cuts, recurrent droughts and broader global uncertainty continued to weigh heavily on growth and public finances. These pressures, he said, underscored the need for Somalia to accelerate domestic revenue mobilisation and maintain disciplined spending.
Somalia is planning to expand social spending funded from domestic resources for the first time in 2026. The multilateral lender described it as an important step in cushioning citizens from the social impacts of reduced donor support.
The Fund said fiscal performance in 2025 had remained strong, with resilient revenue collection and progress on key reforms.
The Somali cabinet-approved 2026 budget, which aligns with IMF programme objectives, prioritises further revenue mobilisation and safeguards priority expenditures.
Among the government’s revenue plans are continued customs modernisation, enforcement of the income tax law and improvements in revenue administration.
The IMF also stressed the importance of strengthening public financial and debt management as Somalia prepares to access external concessional borrowing.
Clarke urged Somali authorities to maintain transparency and accountability in the emerging petroleum sector, following the completion of a new legal framework, and to push ahead with governance improvements, anti-corruption measures and climate resilience efforts.
