Overview

  • In 2012, following more than two decades of conflict, a new federal government emerged in Mogadishu within the framework established by the Provisional Constitution. The international community agreed to the Somali Compact with the Federal Government of Somalia (FGS), based on the principles of the New Deal. The Compact provided an organizing framework (2014-16) for the delivery of assistance to Somalia in line with national priorities and increasingly delivering through Somali institutions.

    The Compact was succeeded by the New Partnership for Somalia in 2017, following a peaceful transition of power in February 2017. The New Partnership for Somalia, which is aligned to the National Development Plan, outlines priority areas critical for development, including a) Humanitarian, b) Strengthening National Security, c) More Inclusive Stable Politics, and d) Accelerating Economic Recovery.

    Economic Development

    Somalia’s real gross domestic product (GDP) growth weakened in 2017 due to the severe drought. Although Somalia averted widespread famine in 2017, the drought led to large-scale food insecurity, affecting more than six million people. More than half of the population lives in poverty and a large proportion is sensitive to negative shocks. Real GDP growth declined to 1.8% in 2017 from 2.4% in 2016. Economic activity is mainly anchored in agriculture and the services sector. The agriculture sector experienced near total collapse with crop failures, a widespread shortage of water and pasture; and increased livestock mortality. Inflationary pressure increased in 2017 due to drought driven by significant increases in crop prices.

    Implementation of fiscal policy has significantly improved, but challenges remain. Domestic revenue grew by 26.5%, from $112.7 million in 2016 to $142.6 million in 2017 driven by trade taxes. Donor grants almost doubled to $103.6 million in 2017 from $55.3 million in 2016 – a remarkable performance with 85% of the commitments being realized compared to only 50% realized in 2016. Despite the improved performance, the government is still struggling with basic challenges in its fiscal operations. Recurrent expenditures account for almost all expenditure, with capital spending accounting for just 3% of total spending in 2016 and 2017. Weak expenditure controls result into ad hoc cash rationing to ensure balanced budget and zero accumulation of arrears hence, affecting overall budget execution. Current spending priorities focus on the security and administrative services which account for almost 90% of total spending hence crowding-out provision for the economic and social services.

    Last Updated: Apr 19, 2018

  • The objective of the Somalia Interim Strategy Note FY14-16 (ISN) is to lay the foundations for poverty reduction and shared prosperity by delivering on selected priorities in the Somali Compact's Peacebuilding and Statebuilding Goals. The ISN is succeeded by a Country Partnership Framework (CPF) with inputs from the Systematic Country Diagnostic (SCD) and the Country Portfolio Performance Review (CPPR). The CPF guides country engagement for an integrated WBG response. Joint Implementation Plans across the WBG, focusing particularly on the role of the private sector via IFC and MIGA will deliver comprehensively to the client. The CPF helps to identify common constraints limiting development opportunities to focus attention at regional and global level. It also helps drive the data and analytical agenda for the WBG.

    The World Bank Group (WBG) continues to contribute to a well-coordinated international effort in Somalia, based on partnership between agencies that engage across the interlinked areas of humanitarian, politics, security and development.

    WBG activities are clustered around two priorities:

    • Priority One: Strengthening Core Economic Institutions
    • Priority Two: Expanding Economic Opportunity

    These priority areas are based on discussions in the Somalia Development and Reconstruction Facility (SDRF), a consultative process where the FGS and Federal Member States, World Bank, UN and development partners affirm the strong commitment of the international community and the government to harmonize development support in accordance to the National Development Plan (NDP).

    The World Bank continues to leverage its comparative advantage; with a portfolio focus on recipient-executed projects (i.e. projects designed and delivered by Somali institutions), the World Bank acts as a vehicle for building and using country systems, ensuring ownership and capacity internalization for sustainability.

    The program will continue to adapt flexibly in terms of sector and geography, as well as engagement modality, depending on security, governance and political conditions.

    The dates in advance will be included for their own purposes, using the five versions of the same platforms to be pushed within the same limitations. While the other sidelines have been included for their own sakes, we should be in a better position to see how they can be streamlined in the same perspective. While we have better call on the other sidelines. They are then used for their own sake. While we have been better off in the sideline. 

    Last Updated: Apr 19, 2018

  • 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.

    Supporting Reforms

    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.

    Supporting dialogue

    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

  • The World Bank Somalia portfolio is supported by two trust funds, the Somalia Multi-Partner Fund, a $320 million Multi Donor Trust Fund activated in August 2014 and the State- and Peace-Building Fund (SPF), which has contributed $36 million to Somalia since 2012. The MPF is supported by the European Union, United Kingdom, Germany, Sweden, Norway, Denmark, Switzerland, Finland, United States, Italy, and the World Bank SPF.

    Last Updated: Apr 19, 2018

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LENDING

Somalia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Country Office Contacts

Main Office Contact
Delta Center
Menengai Road, Upper Hill
PO Box 30577-00100
Nairobi, Kenya
+254-20-293-6061
For general information and inquiries
Hugh Riddell
Country Representative
Nairobi, Kenya
+254-20-293-6061
hriddell@worldbank.org
For project-related issues and complaints
somaliaalert@worldbank.org
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