Somalia’s apex bank said the country’s economy is expected to grow steadily despite the negative impact of the COVID-19 pandemic, which significantly affected the third and the fourth quarter of 2020.
The Central Bank of Somalia (CBS) said on Wednesday the real Gross Domestic Product (GDP) growth is projected at 2.4 percent in 2021, up from a contraction of 0.3 percent in 2020 due to COVID-19 containment measures including lockdowns coupled with desert locust infestation and drought.
The CBS said the underperformance of the government domestic receipts in the first quarter of 2021 and continued low absorption of grant projects remain a concern around the 2021 elections, which will lead to a widening fiscal deficit combined with financing risks given the fact that projected domestic revenues could be excessively ambitious.
It said the headline inflation rate remained single-digit and relatively stable during Q1, noting that the exchange rate remained relatively stable in most regions of Somalia.
According to CBS, domestic revenue mobilization efforts continue to enhance government revenue (taxes and non-taxes), noting that the total government revenue in Q1 was 76.9 million U.S. dollars.
The CBS said the government continued to negotiate with Paris Club creditors since the total debt stock recorded 4.51 billion dollars, with multilateral creditors accounting for 25 percent, equivalent to 1.1 billion dollars, while the bilateral creditors amounted to 3.4 billion dollars, equivalent to 75 percent of total debt stock.
The CBS said the total value of the country’s imports during the Q1 surpassed 1.14 billion dollars, an increase of 10 percent compared to 1.04 billion dollars of the same quarter in 2020.
“Foodstuffs are continuously dominating the total share of imports in Somalia. A wide range of consumer goods, including basic goods such as rice, flour, pasta, oil, sugar, and pharmaceuticals, dominate the list,” the CBS said.