Evaluation of the Somalia commodity import program

Special evaluation covers the period 5/82-4/84 and is based on site visits, document review, and interviews with the traders and public sector personnel. Despite the unfamiliarity of Government of Somalia (GSDR) personnel and Somali traders with either the CIP or international trade and despite the GSDR's initial hostility to private enterprise, CIP implementation has proceeded smoothly and with extreme success; the program should be studied for possible use in other CIP countries. Private sector imports have not been limited, as often happens, to a single or to a few commodities, but have been varied and directed to agriculture and to agro- and light industries (with very tangible benefits to a stagnant economy), while public sector imports have included raw materials, equipment, and spare parts for GDSR utilities and enterprises. Policy dialogue has successfully shifted the GSDR's economic policy from a focus on administrative control toward a reliance on market forces and the private sector. Although only a relatively small proportion of local currency generations - and these from CIP I only - have been disbursed so far for onlending by the Somali Development Bank (SDB), the generations have been fully programmed and only await project documentation before disbursement begins, while the loans made to date by the SDB have laid a basis - on which USAID/S should build - for diversification. It is recommended that USAID/S maintain the dedication and imagination it has shown in implementing the program so far, especially by continuing to review import allocations (and their use) to the public and private sectors; and that given the absence of an IMF program for Somalia, it adopt a more innovative approach to policy dialogue, e.g., expanding CIP exchange and perhaps interest rates and increasing compliance with existing covenants).