SL contributes Rs. 163 million to IMF’s Somalia financing plan

• Contribution under IMF’s burden-sharing mechanism designed to protect Fund against risk of losses from repayment failures
• Fund requested member nations to totally or partially contribute from internal resources to Somalia account
• SL member of IMF since 1950

By Chandani Kirinde

Cabinet on Wednesday approved the transfer of Rs. 163 million to the Somalia Control Account of the International Monetary Fund (IMF) as the total contribution from Sri Lanka.

The amount is Sri Lanka’s contribution to the financing plan that will help the IMF cover its share of debt relief for Somalia, which was approved in December 2019 by its governing body.

The contribution is made under the burden-sharing mechanism, which is designed for the specific purpose of protecting the Fund against the risk of a loss resulting from the ultimate failure of a member to repay its overdue charges and repurchases in the General Resources Account (GRA). The mechanism was put in place in 1986. The funds contributed by member nations will be used to clear Somalia’s arrears to the IMF.

The Fund had requested member nations to totally or partially contribute from their internal resources to the Somalia account.

The Central Bank of Sri Lanka, with the concurrence of the Ministry of Foreign Relations, gave their approval for Sri Lanka to make the contribution.

The Cabinet proposal to this effect was presented by Prime Minister and Minister of Finance, Economic and Policy Development Mahinda Rajapaksa to transfer the amount equal to Rs. 163 million to the Somalia Control account. 

Sri Lanka joined the IMF in August 1950.