Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). Find Out

Overview

  • Following more than two decades of conflict, a new federal government emerged in Mogadishu in 2012 within the framework established by the Provisional Constitution. Soon after, the international community agreed to the Somali New Deal Compact–an organizing framework (2014-2016) for assistance delivery to the country—with the Federal Government of Somalia (FGS),  in line with national priorities, increasing delivery 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, followed by the Somali Partnership Forum in Brussels in July 2018, aligns with the National Development Plan, and outlines collective priority areas critical for development, including humanitarian issues, national security, inclusive politics, and economic recovery.

    The biggest challenge now is how to engage with the people of Somalia to chart a path for an all-inclusive social, economic and political development agenda.

    The country also faces a significant threat from a recent locust invasion and COVID-19. The Ministry of Agriculture declared a national emergency on February 2 following a locust invasion, which threatens food security. The United Nation’s Food and Agriculture Organization (FAO) projects that the number of locusts could grow 400 times by June if not treated. FAO put out a $76 million appeal to fund the spraying of the affected areas with biopesticides. Spraying commenced in February, but might be disrupted due to COVID-19 related restrictions.

    The first case of COVID-19 was reported on March 16. The Ministry of Health has suspended all international flights and restricted entry for all travelers from worst-hit countries through to March 30. All learning institutions are closed, and public meetings banned in a bid to curb the spread of the novel corona virus. The government has dedicated $5 million to cushion against further transmission. Somalia’s health indicators are among the worst in the world and COVID-19 cases threaten to stretch a fragile healthcare system. Somalia will benefit from the World Bank Group’s increased $14 billion package of fast-track financing to assist companies and countries in their efforts to prevent, detect and respond to the rapid spread of COVID-19.

    Economic Development

    Years of conflict and fragility have left Somalia’s economy with a range of challenges, including population growth outstripping economic growth, acute poverty and vulnerability, recurrent external trade and climate shocks. Weak fiscal space and institutions, active insurgency and an incomplete political settlement have also affected the country’s economic strength.

    Somalia also has several opportunities, as the economy is transitioning from traditional, rural pastoralism to urban, trade and services. Somalia’s economy has remained resilient despite recurrent shocks, including drought and sporadic terror attacks. Driven by increased confidence in the economy, implemented reforms and political stability, the economy is forecasted to grow at 3.2% in 2020, up from 2.9% in 2019.

    Somalia’s business community is resilient, globally connected and entrepreneurial, technology offers high rates of mobile money penetration, and new opportunities for the Horn of Africa economic cooperation and integration plays to the country’s advantage.

    The government is also committed to institutional reforms and reengagement with the region, including opportunities to rebuild human capital and chart a pathway toward economic resilience and growth.

    Heavily-Indebted Poor Countries (HIPC) Decision Point

     

    Somalia is focused on reaching HIPC Decision Point, to unlock financing for development and poverty reduction. In FY19, the World Bank supported $140 million in pre-arrears clearance grants to accelerate progress to the HIPC Decision Point, and secure gains in resilience. Somalia recently cleared its arrears to the International Development Association, paving the way for the country to receive debt relief under the Heavily Indebted Poor Country and Multilateral Debt Relief Initiative.

    Last Updated: Mar 23, 2020

  • 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 humanitarian-development-peace nexus.

    The Somalia Country Partnership Framework (CPF FY2019-22) was endorsed in September 2018 and guides country engagement for an integrated WBG response. Joint Implementation Plans across the Bank, focusing particularly on the role of the private sector via International Finance Corporation, 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.

    WBG activities are clustered around two CPF priorities:

    1. Strengthening Institutions to Deliver
    2. Restoring Economic Resilience and Opportunities

    The CPF aims to translate political and institutional gains into tangible improvements in the lives of people. Across both areas, the CPF aims to ensure gender equality and equity, the inclusion of marginalized groups, and will seek to address fragility by building resilience across all sectors.

    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, United Nations and development partners affirm the strong commitment of the international community and the Government of Somalia 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.

    Recently approved projects include:

     

    • Shock Responsive Safety Nets for Human Capital Project (IDA $65 million approved in
      August 2019 (emergency procedures). The project development objectives are to provide cash transfers to targeted poor and vulnerable households and establish the key building blocks of a national shock-responsive safety net system.
    • Somalia Urban Resilience Program (SURP), Phase II (IDA $50 million) and Multi Partner Fund $60 million approved in October 2019. The project aims to strengthen public service delivery capacity of local governments and increase access to urban infrastructure and services in selected areas.

    Last Updated: Mar 23, 2020

  • The World Bank program in Somalia is largely funded by the Multi-Partner Fund (MPF), and support from pre-arrears clearance grants. The current MPF portfolio focuses on core state functions, socio-economic recovery and urban development in Somalia.

    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.

    Important steps have been taken in the areas of payroll reform, strengthening of the Somalia Financial Management Information System (SFMIS) as well as efforts to strengthen budget preparation and payment systems. The federal government’s 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 and sustainable civil service. These reforms are being rolled out federally and in Federal Member States (FMS) to ensure national coverage.

    These positive developments informed the first Article IV Consultation by the International Monetary Fund (IMF) in two decades in July 2015. IMF management approved a third 12‑month staff-monitored program (SMP) covering the period May 2018–April 2019, following Somalia’s successful completion of two SMP’s.

     

    Supporting Dialogue

    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. Public-Private Dialogues facilitated through sector engagements in Oil and Gas, Energy and Information & Communications Technology are building an understanding of the benefits to the consumer and to the private sector of improving the regulatory environment and the role of the federal government in supporting economic growth. Projects on private and financial sector development, and remittances are helping to build systems for improving access to finance – a key constraint to growth.

    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, 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.

     

    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 mapping wind patterns to inform investments in the energy sector and analyzing the Somali mobile money ecosystem.

    There are also poverty and macro-fiscal analyses through the High-Frequency Survey and the “Somalia Economic Update” series. The World Bank partnered with Somali authorities, the United Nations and European Union to develop the Drought Impact and Needs Assessment (DINA) and subsequent Resilience and Recovery Framework (RRF) in 2018, which identify the root causes of recurrent drought, its cost and a strategy for medium-term recovery and long-term resilience.

    Last Updated: Mar 23, 2020

  • 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’s State and Peacebuilding Fund.

    The World Bank Group’s Board of Directors approved two investment programs worth $80 million in September 2018, marking the first International Development Association financing for government in more than 30 years.

    Last Updated: Mar 23, 2020

Api


LENDING

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

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

More Photos Arrow

In Depth

Coronavirus Sparks Recession

The latest economic analysis for the region predicts the pandemic could cost as much as $79 billion in output losses for 2020.

CPIA Africa

Africa’s poorest countries saw little to no progress on average in improving the quality of their policy and institutional frameworks in 2018.

IDA in Africa

With IDA’s help, hundreds of millions of people have escaped poverty—through the creation of jobs, access to clean water, schools, roads, nutrition, electricity, and more.

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

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 Manager
Nairobi, Kenya
+254-20-293-6061
hriddell@worldbank.org
For project-related issues and complaints
somaliaalert@worldbank.org