Somalia unveils ambitious reforms to lift economy

Somalia has demonstrated remarkable economic growth in recent years, with GDP increasing by 2.8 percent in 2018 and 2.9 percent in 2019. The country was on track to further growth of 3.2 percent this year before the onset of the COVID-19 pandemic. To ensure economic stability and continue this positive trajectory, Somalia has implemented a series of economic reforms. CNBC Africa's Arnold Kwizera spoke to Gamal Mohamed Hassan, the Minister for Planning, Investment, and Economic Development of Somalia, to delve into the details of these reform initiatives. Hassan highlighted the significant policy changes and measures that have contributed to the country's economic growth. One of the key reforms focused on creating an enabling environment for both local and international investors. Through collaborations with international financial institutions like the IMF and the World Bank, Somalia has made significant strides in opening up various sectors of the economy and attracting foreign direct investment. The government's efforts have led to an increase in exports, particularly in sectors like sesame and banana production. In addition, Somalia successfully negotiated debt relief with the IMF, which has helped reduce the country's debt burden and pave the way for further economic progress. The IMF's conditions for debt relief included reforms in key sectors such as domestic revenue generation, security, and contract review to align with international standards. Hassan emphasized the importance of fulfilling these conditions to unlock new avenues for economic growth. Moving forward, Somalia has developed a comprehensive poverty reduction strategy and a national development plan spanning from 2020 to 2024. These initiatives aim to promote economic growth, enhance infrastructure, create job opportunities, and ensure social protection for vulnerable households. Despite challenges posed by the COVID-19 pandemic and other external factors such as locust invasions and climate change, Somalia remains resilient and committed to fostering economic diversification. The pandemic has impacted key sectors like livestock exports, leading to revised GDP projections. However, the government has taken proactive measures to mitigate the economic fallout through stringent protocols, increased testing capacity, and a COVID-19 task force chaired by the Prime Minister. The country's focus on diversifying its economic base and harnessing its marine resources reflects a strategic approach to building a sustainable and resilient economy. Somalia's resilience in the face of multiple challenges underscores its determination to achieve long-term economic stability and prosperity.