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Major leap for Somalia as it qualifies for World Bank’s IDA financing in 30 years

Storyline:Business, National News

By T. Roble

Somalia has for the first time in 30 years qualified for the World Bank’s International Development Agency (IDA) opening financing for the Horn of Africa country to boost economic growth, reduce poverty and improve livelihoods.

The World Bank announced Tuesday it had approved a four year Country Partnership Framework (CPF) running from 2019-22 aimed at building institutions to deliver services and restoring economic resilience and opportunities.

The approval of the CPF unlocks the IDA financing through Pre-Arrears Clearance Grants to support projects in finance reform and improving financial management capabilities.

The IDA is a part of the World Bank which helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth.

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The re-admittance of Somalia into IDA fold is a key step in country’s path to normalization of relations with International Financial Intuitions which should open gates for the much needed credit for the country’s recovery. The IMF this past week praised Somalia for its financial reform process noting the country was making remarkable progress towards qualifying for the Highly Indebted and Poor Countries (HIPC) initiative. The HIPC is a phased process towards debt relief.

$80 million grant

With the approval of the CPF, the World Bank board endorsed two projects worth $80 million. The first project billed at $60 million is aimed at supporting the government meet recurrent costs and support financing reform while the second one ($20million) will bolster domestic revenue generation and build capacity of government institutions to manage public finances.

World Bank country director for Somalia Bella Bird said CPF will be instrumental in bolstering public trust in government through effective service delivery.

“Our role since reengaging has been to help Somalia rebuild core institutions that can restore citizens’ trust and redistribute resources to address extreme poverty and begin to create opportunities for those who have been excluded,” said Bird. “For this CPF, our focus is to support Somalia’s institutions to extend their reach in providing services to citizens and to scale up our interventions that will open up economic opportunities.”

Some of the key project areas of the CPF include training of 750 female health workers in the regions, financing for and proficiency testing of 3,000 school teachers and doubling of federal Inland Revenue, and increased trust in formal resource sharing and distribution through inter-governmental transfers system.

The four year plan will also support small and medium enterprises (SMEs) and youth gprojects in renewal energy and target 250,000 people in rural areas, 56% of whom are women for increased access to water for resilience and productivity.