The World Bank program in Somalia is funded by the Multi-Partner Fund (MPF). The current MPF focuses on core state functions, socio-economic recovery, and urban development in Somalia. By adopting a phased approach to development and scaling-up, the fund adapts itself to the dynamics of Somalia’s 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 to the Somali authorities to help them deliver services and enhance stability and growth in the country.
Important steps have been taken in payroll reform and strengthening the Somalia Financial Management Information System (SFMIS), as well as in other budget preparation and payment systems. The Federal Government of Somalia’s (FGS’s) increased public spending illustrates the improvements in its ability for government systems to transparently manage funds.
In parallel to process and systems reform, the MPF is engaging the government to support the development of a professional, high quality, sustainable civil service. These reforms are being rolled out at the level of the federal government and in select Federal Member States (FMS) to ensure national coverage. Federal government officials and their counterparts in state governments continue to discuss intergovernmental fiscal relations, reflecting increasingly constructive relations between the country’s federal and regional authorities.
These positive 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). In May 2017, the IMF reached an agreement with the Somali authorities for a second 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 to develop a sustainable, private sector-led economy, through the Public-Private Cooperation Agreement to Accelerate Somalia’s Economic Recovery agreed at the London Conference 2017.
The dialogue facilitated through sector engagements in the Oil and Gas, Energy and ICT sectors are building an understanding of the benefits to the consumer and the private sector of improving the economy’s 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 environment for private and financial sector development, and catalyze private investment and job creation. 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 dialogue to strengthen transparency and accountability in 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 fill knowledge gaps for evidence-based decision making in targeted sectors. This includes, for example, mapping wind patterns to help inform investment 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; and analyzing the telecommunications spectrum to provide information for the more optimal allocation of frequencies.
The Bank also does periodic analyses of poverty in Somalia through the High-Frequency Survey methodology, as well as the twice yearly, Somalia Economic Update series.
Lastly, the World Bank is collaborating with the UN to produce analytical work on the Use of Country Systems (UCS), aid flow analysis, and Security and Justice Public Expenditure Review.
Moving forward, analytical work and data collection will be enhanced under the MPF to provide better information for decision making within the government and amongst development partners. Examples include the upcoming Post-Disaster Needs Assessment and Country Economic Memorandum on agriculture.
Last Updated: Oct 13, 2017