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Hashim Al-Ali: Towards a realistic medium term macroeconomic and fiscal framework and
outlook for the Somali national economy (2017- 2019)

outlook, for the years 2017-2019 which is the time span for the recently completed Somali
National Development Plan (SNDP). Such macroeconomic and fiscal framework and outlook,
has been quantitatively structured and driven, through formulating and empirically articulating
an aggregated macro-fiscal analytical modelling approach.

Key Words: Somalia, Medium Term Macroeconomic Framework, Fiscal Framework, National
Development Plan, Aggregate Modelling Approach

JEL Classification: E21; E32; E52; E62

Introduction

For Somali economy, it is absolutely necessary to efficiently manage and use the human and
natural resources which God has given to the nation, to foster and maintain a positive rate of
economic growth, reduce the poverty and lessen the reliance on international donors’ assistance.
The Government recognizes achieving these goals require a series of policy and a concerted
national efforts to encourage and carry out development and expansion of agriculture, livestock,
fisheries, mining, infrastructure that facilitate development, especially transportation with
different modes, marketing and productive sectors production related and inputs using
manufacturing industries, with particular emphasis on value-chain activities and industries in
which Somalia enjoys a comparative advantages.

The government of Somalia will encourage and promote the development and expansion of the
private sector’s role and participation, in all above activities and sectors, through providing and
creating the necessary laws and regulations, policies, facilities and conducive environment and
right incentives.

The principal objective of this paper is to analyze actual macroeconomic and fiscal characteristics
and setting of the Somali economy, and to establish realistic and consistent medium term
macroeconomic and fiscal framework and outlook for the years 2017-2019 which are the time span
for the recently completed Somali National Development Plan (SNDP). Such macroeconomic and
fiscal framework and outlook, has been quantitatively achieved, through formulating and
empirically articulated an aggregated macro-fiscal analytical modelling approach.

Macroeconomic Objective

Macroeconomic Stability is the Main Objective of the Macroeconomic Development and
Enhancement in Somalia. This can be defined and brought about by the following policy principles:

Ø Macroeconomic Stability in any economy means; having created real growth in the
economy that accompanied with lower single digit inflation rate and single digit of
unemployment rate in the national economy;
Ø Macroeconomic stability achieved when key economic relationships in the economy are
in balance. These, amongst other things, are:

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