The International Monetary Fund (IMF) has agreed to extend the duration of its financial aid programme to Somalia.
The fund’s aid was due to end this month if a new administration is not in place, an official said.
The decision comes after Hassan Sheikh Mohamoud was elected as Somalia’s new leader during the weekend.
The IMF’s three-year $400 million (€380 million) aid programme was due to expire automatically on 17 May if elections were not held leading to a new administration in the poor country, which is plagued by an insurgency by radical Islamists, the Shebab.
Last week, the IMF agreed to the Mogadishu government’s request for a three-month extension of the programme, until 17 August.
“The extension will allow time to confirm policy agreements with the new government and confirm funding assurances with development partners,” Laura Jaramillo Mayor, the IMF’s Somalia mission chief, told AFP in an email Thursday evening.
International partners have welcomed the election of Hassan Sheikh Mohamoud, calling on him to take charge of the problems of the Horn of Africa country.
Under the IMF programme, Somalia’s debt could be reduced to $557 million, or about 6% of estimated GDP, Jaramillo said in an interview with AFP in February.
This debt reduction could then allow Mogadishu to attract more funds from international partners to develop its private sector.