MOGADISHU, Dec. 20 (Xinhua) -- The International Monetary Fund (IMF) said its board has approved a new three-year arrangement under the Extended Credit Facility (ECF) for Somalia in the amount of 100 million U.S. dollars.

The IMF said in a statement released on Tuesday night that Somalia has made considerable progress in strengthening key economic and financial institutions as well as improving governance.

The approval of the ECF arrangement enables the immediate disbursement of about 40 million U.S. dollars in budget support, the IMF said.

The approval of the financing follows the successful completion of a previous ECF arrangement approved in 2020 that expired on Dec. 15 and reached the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative on Dec. 13.

"Despite the progress achieved, Somalia faces significant challenges, including those stemming from economic, social, security, and climate risks," the IMF said.

According to the lender, an estimated 54 percent of the population was living on less than 2 dollars per day in 2022.

The growth is currently insufficient to reduce widespread poverty, address large social needs, and create sufficient jobs for the youth, the IMF said.

It added that Somalia is highly vulnerable to climate shocks that hurt growth and hinder poverty reduction efforts.

The IMF said the three-year ECF program will support the authorities' post-HIPC reform strategy to further strengthen key economic institutions and promote macroeconomic stability and growth, in line with Somalia's national development plan and the government's long-term vision. Enditem

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