Title page
Contents
PRESS RELEASE - PR23/164 2
FIFTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, REQUESTS FOR WAIVER OF NONOBSERVANCE OF A PERFORMANCE... 4
EXECUTIVE SUMMARY 4
CONTEXT 8
RECENT ECONOMIC DEVELOPMENTS 9
PROGRAM PERFORMANCE 10
OUTLOOK AND RISKS 11
PROGRAM AND POLICY DISCUSSIONS 12
A. Fiscal Policy 12
B. Monetary and Financial Policy 14
C. Governance 15
D. HIPC Completion Point 16
PROGRAM FINANCING AND SAFEGUARDS 16
STAFF APPRAISAL 18
Annex I. Risk Assessment Matrix 41
Annex II. Progress on HIPC Completion Point Triggers 43
Appendix I. Letter of Intent 45
Attachment I. Supplemental Memorandum of Economic and Financial Policies for 2020-2023 47
Attachment II. Technical Memorandum of Understanding 61
FIFTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, REQUESTS FOR WAIVER OF NONOBSERVANCE OF A PERFORMANCE... 72
PUBLIC DEBT COVERAGE 73
BACKGROUND ON DEBT 74
BACKGROUND ON MACROECONOMIC FORECASTS 75
COUNTRY CLASSIFICATION AND DETERMINATION OF SCENARIO STRESS TESTS 80
EXTERNAL DEBT SUSTAINABILITY 80
PUBLIC DEBT SUSTAINABILITY 82
RISK RATING AND VULNERABILITIES 82
AUTHORITIES' VIEWS 82
Annex I. Policy Reform Agenda 91
Annex II. HIPC Completion Point 93
FIFTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, REQUESTS FOR WAIVER OF NONOBSERVANCE OF A PERFORMANCE... 6
Text Table 1. Somalia: Increase in Domestic Revenue, Excluding One-off Revenue 13
Text Table 2. Somalia: Federal Government Operations Excluding Donor-Funded Projects, 2022-23 13
Table 1. Somalia: Selected Economic Indicators, 2021-2028 24
Table 2a. Somalia: Federal Government Operations, 2021-2028 25
Table 2b. Somalia: Federal Government Operations, 2021-2028 26
Table 2c. Somalia: General Government Operations, 2019-2022 27
Table 2d. Somalia: General Government Operations, 2019-2022 28
Table 3. Somalia: Summary Accounts of the Central Bank, 2019-2022 29
Table 4. Somalia: Consolidated Commercial Banks Balance Sheet, 2019-2022 30
Table 5. Somalia: Monetary Survey 2021-2028 31
Table 6a. Somalia: Balance of Payments, 2021-2028 32
Table 6b. Somalia: Balance of Payments, 2021-2028 33
Table 7. Somalia: Revised Schedule of Reviews and Disbursements 34
Table 8. Somalia: External Financing Needs and Sources, 2020-2028 35
Table 9. Somalia: Indicators of Fund Credit and Capacity to Repay, 2023-2038 36
Table 10. Somalia: Quantitative Performance Criteria and Indicative Targets Under the Extended Credit Facility Arrangement (December 2022-December 2023) 37
Table 11. Somalia: Structural Benchmarks Under the ECF Arrangement, December 2022-December 2023 38
Table 12. Somalia: Proposed Structural Benchmarks Under the ECF Arrangement, December 2022-December 2023 39
Table 13. Somalia: Public Debt Holder Profile, 2022-2024 40
FIFTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, REQUESTS FOR WAIVER OF NONOBSERVANCE OF A PERFORMANCE... 74
Text Table 1. Somalia: Public Debt Coverage 74
Text Table 2. Somalia: Macroeconomic Projections 78
Text Table 3. Somalia: Composite Indicator and Threshold Tables 80
Table 1. Somalia: External Debt Sustainability Framework, Baseline Scenario, 2020-2043 83
Table 2. Somalia: Public Sector Debt Sustainability Framework, Baseline Scenario, 2020-2043 84
Table 3. Somalia: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2023-2033 88
Table 4. Somalia: Sensitivity Analysis for Key Indicators of Public Debt, 2023-2033 89
Table 5. Somalia: Public Debt Holder Profile, 2022-2024 90
Figure 1. Somalia: High Frequency Indicators 20
Figure 2. Somalia: Fiscal Indicators 21
Figure 3a. Somalia: Social Indicators 22
Figure 3b. Somalia: Infrastructure and Vulnerability to Climate Shocks 23
FIFTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT, REQUESTS FOR WAIVER OF NONOBSERVANCE OF A PERFORMANCE... 85
Figure 1. Somalia: Indicators of Public and Publicly Guaranteed External Debt Under Alternatives Scenarios, 2023-2033 85
Figure 2. Somalia: Indicators of Public Debt Under Alternative Scenarios, 2023-2033 86
Figure 3. Somalia: Realism Tools 87
Attachment I. Supplemental Memorandum of Economic and Financial Policies for 2020-2023 58
Table 1. Somalia: Quantitative Performance Indicators and Indicative Targets Under the ECF (December 2022-December 2023) 58
Table 2. Somalia: Structural Benchmarks Under the ECF Arrangement (December 2022-December 2023) 59
Table 3. Somalia: Proposed Structural Benchmarks Under the ECF Arrangement (December 2022-December 2023) 60
Attachment II. Technical Memorandum of Understanding 64
Table 1. Somalia: Adjustor to the Fiscal Balance Floor, Maximum Amount 64
Table 2. Somalia: Adjustors to the NIR Floor 67
Table 3. Somalia: Data Reporting, March 2020-December 2023 68