The World Bank program in Somalia is largely funded by the Multi-Partner Fund (MPF). The current MPF portfolio focuses on core state functions, socio-economic recovery and urban development in Somalia. By adopting a phased approach to pipeline development and scale-up, the fund adapts to the dynamic operating context, and responds to new opportunities and challenges, such as the 2017 drought.
The MPF has made progress in engaging key government institutions to enhance their role in revenue collection and service delivery. The ‘Troika’ projects, namely the Recurrent Cost & Reform Financing (RCRF) Program, the Public Financial Management (PFM) Reform Project and the Public Sector Capacity Injection Project (CIP), focus on core government functions and support the Somali authorities to deliver services and enhance stability and growth in the country.
Steps have been taken in payroll reform, strengthening of the Somalia Financial Management Information System (SFMIS), as well as efforts to strengthen budget preparation and payment systems. The FGS’ increased public spending showcases enhanced capacity for government systems to transparently manage funds.
In parallel to process and systems reform, the MPF is engaging with the government to support the development of a professional, high quality and sustainable civil service. These reforms are being rolled out at the federal level, and in select Federal Member States (FMS) to ensure national coverage. Federal and state government counterparts continue the dialogue on intergovernmental fiscal relations, reflecting the increasingly constructive relations between the federal and regional authorities.
These developments informed the first Article IV Consultation by the International Monetary Fund (IMF) in two decades in July 2015 and the initiation of discussions on a potential Staff Monitored Program (SMP) at the Annual Meetings in Lima in October. IMF management approved a second 12‑month SMP covering the period May 2017–April 2018, following Somalia’s successful completion of its first SMP.
The MPF supports the dialogue between the public and private sectors. Recognizing that the Somali economy has reached the margins of growth in an unregulated context, MPF projects are helping the government in the development of a sustainable private sector-led economy, manifesting itself through the Public-Private Cooperation Agreement to Accelerate Somalia’s Economic Recovery agreed at the London Conference 2017. The dialogues facilitated through sector engagements in Oil and Gas, Energy and ICT are building an understanding of the benefits to the consumer and to the private sector of improving the regulatory environment as well as of the role of the federal government in supporting economic growth.
In parallel, projects on private and financial sector development as well as remittances are helping to build systems for improving access to finance: a key constraint to growth. The Somali Core Economic Institutions and Opportunities Program (SCORE) is an investment designed to improve the enabling environment for private and financial sector development and catalyze private investment and job creation. In complement, the Project to Support Remittance Flows to Somalia (SRFS) works alongside the Central Bank of Somalia (CBS) to implement a number of activities aimed at tackling key deficiencies affecting the resilience of the remittance market in Somalia until a sounder financial system is in place.
The World Bank is supporting the Ministry of Finance in facilitating policy dialogues to strengthen transparency and accountability in the areas of strategic public procurement and concessions, asset recovery and other selected areas of financial governance.
The MPF pipeline has also served as a platform for catalyzing engagement by the International Finance Corporation (IFC) in Somalia. The IFC recently set up a Trust Fund to leverage private capital for further reforms.
Supporting the evidence base
In a context defined by the absence of credible data and information, the MPF portfolio is helping to fill knowledge gaps for evidence-based decision making in targeted sectors. This includes, for example, mapping wind patterns to inform investments in the energy sector, benchmarking regional salary scales for civil servants, analyzing the Somali mobile money ecosystem to pilot a government platform for bulk payments, the telecommunications spectrum to inform a more optimal allocation of frequencies. There are also periodic analyses of poverty in Somalia through the High-Frequency Survey methodology as well as the bi-annual “Somalia Economic Update” series. The World Bank partnered with Somali authorities, the UN and EU to develop the Drought Impact and Needs Assessment (DINA) and subsequent Resilience and Recovery Framework (RRF), which identify the root causes of recurrent drought, its cost and develop a strategy for medium-term recovery and long-term resilience. Lastly, the World Bank is collaborating with the UN to produce analytical work on the Use of Country Systems (UCS), Country Economic Memorandums (CEM), aid flow analyses and Public Expenditure Reviews (PER).
Moving forward, analytical work and data collection will be enhanced under the MPF to provide better information for decision making processes within the government and amongst development partners. Examples include the upcoming CEM on connectivity, and closer collaboration between WBG and IMF in producing economic data.
Last Updated: Apr 19, 2018