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IMF extends Somalia funding following election

MOGADISHU (AFP) – The International Monetary Fund (IMF) has agreed to extend the duration of a crucial aid package to Somalia, a senior official said, following a long-overdue presidential election last weekend.

The three-year USD400-million (EUR380-million) aid package from the IMF had been set to automatically expire on May 17 if a new administration was not in place by then, with multiple election delays adding to the heavily indebted country’s turmoil.

But last week the IMF Executive Board accepted the Somali government’s request for a three-month extension until August 17, giving newly-elected President Hassan Sheikh Mohamud’s government time to examine and endorse planned reforms.

“The extension will provide the time needed to confirm policy understandings with the new government and confirm financing assurances with development partners,” the IMF’s mission chief for Somalia Laura Jaramillo Mayor told AFP in an email sent on Thursday.

Somalia’s international partners welcomed the election of President Mohamud, with many hoping it will draw a line under a long-running political crisis that has distracted the government from other threats, including a violent insurgency and a devastating drought.

Under the terms of the IMF programme, Somalia’s debt could fall to USD557 million as early as 2023, Jaramillo told AFP in an interview in February.

That in turn would allow Mogadishu to attract more funding from international partners and help develop its private sector.