World Bank approves $100 million grant for Somalia’s reform efforts

GOOBJOOG NEWS|WASHINGTON: The World Bank has endorsed a $100-million grant to aid Somalia’s reform, improve its economic sector, strengthen fiscal transparency and boost revenue.

The global lender said in a statement the funds will ‘support the government’s efforts to improve fiscal transparency and increase revenues through the harmonization of customs regimes across the federation and improving the governance of intergovernmental fiscal transfers.’

The World Bank Country Manager for Somalia, Kristina Svensson note that, “This operation will increase the government’s fiscal space to respond to the drought situation while continuing to support reforms that advance progress toward attaining debt relief.”

The World Bank stated further that the grant would support the continuation of Somalia’s reform efforts in reaching the Completion Point of the Heavily Indebted Poor Countries (HIPC) Initiative when Somalia will be eligible for full and irrevocable debt relief.

According to the World Bank, “the grant will help create the building blocks for strengthening intergovernmental fiscal cooperation to enhance the ongoing state stabilization agenda critical for stimulating inclusive economic growth by fostering trust and enhancing financial transparency between the federal government and member states.

“Together, these efforts will help improve the government’s ability to continue to provide cash transfers for the country’s poor and most vulnerable, including women, which are a critical coping mechanism amid continuing shocks.”

While signing the agreement on Friday, Finance Minister Abdirahman Beileh thanked the giant bank for approving the grant, saying it could not have come at a better time as the funds would play a great role in financing the country’s future priorities. 

“We are grateful to the WorldBank for approving $100 million USD of budget assistance after the Federal Government of Somalia fulfilled all the agreed economic reform conditions. I was proud to sign this new agreement today and it will truly assist in financing our future priorities.”

The bank disclosed that Somalia still experiences repeated cycles of drought and floods, higher commodity prices and the COVID-19 pandemic, which continue to test the resilience of the Somali population.