The World Bank Group in Somalia: Helping to Rebuild State Institutions Piece by Piece

October 27, 2014


  • For the first time in 23 years, the World Bank Group is reengaged in Somalia, providing public financial management, capacity building and budget support
  • Ending a long period of transitional government, the country has a new constitution, federal institutions, parliament, president and cabinet
  • Challenges remain, including societal fragmentation and deep-seated grievances, state rebuilding, and an ongoing conflict in parts of the country

MOGADISHU, October 27, 2014— For the first time since 1991, the World Bank Group is back at work in Mogadishu.

A new World Bank-administered Multi-Partner Fund for Somalia has recently opened a facility to finance emergency expenditures in Somalia’s budget and several weeks ago, Mogadishu’s federal institutions began receiving salaries and operating support from the Recurrent Cost and Reform Financing project (RCRF).

The RCRF project is at the heart of a New Deal for Somalia, an international commitment to support Somalia’s peace and state-building agenda. A two-year compact maps out essential milestones for stepped engagement for both national and international stakeholders. Most significantly, the agreement signals a shift in the international engagement from aid to a development partnership based on mutual accountability, starting with the RCRF.

International reengagement in the country is an uplifting sign of better times ahead for young Somalis such as 27-year-old Hassan Ahmed, an IT expert who runs the payroll software at the Central Bank of Somalia in Mogadishu, which is directly responsible for paying civil servant salaries.

" This system runs in the cloud and uses biometrics to identify civil servants and pay them their salaries. I am privileged to be able to help my country in this way. "

Hassan Ahmed

IT expert who runs the payroll software at the Central Bank of Somalia

Two years into a fragile transition in southern Somalia, the World Bank Group (WBG) is helping to rebuild state institutions piece by piece. The WBG’s State and Peacebuilding Fund complements the RCRF with intensive assistance to reforms in the Ministry of Finance and Central Bank under the current PFM Capacity Strengthening Project.

“We’ve had a really thorough appraisal process to ensure that our funds can use the country systems and be accounted for,” said Bella Bird, the WBG’s country director for Somalia. “But this is not just about providing short-term emergency support for the budget. This brings us into a close dialogue with the authorities on how best to put in place the basic building blocks of macro-fiscal management and public financial management.”

Using biometric identification, the RCRF now pays thousands of civil servants in the service of the new Somali state through the Central Bank. Through the project, a group of young civil servants from the office of the Accountant General went through an external selection process for the newly-formed External Aid Fiduciary Support (EAFS) department. Their task is to ensure good cooperation and coordination with donors like the WBG, and to ensure that the conditions of grant agreements are met.

“We look forward to work with World Bank and other donors,” said EAFS Director Mohamud. “With the help of the colleagues who served under Special Financing Facility, I am sure we will do a good job.”

The WBG has progressively developed a working relationship with the Somali government since 2012 and in December 2013; an Interim Strategy Note laid out a program of support building the foundations for poverty reduction and shared prosperity by strengthening core economic institutions and expanding economic opportunities. With progress in the security situation, WBG presence on the ground will increase and agreements are now being reached for WBG representation in the capital. But challenges still remain.

Fragmented by two decades of conflict, the country has now started to discuss a new federation of states while also working to address deep-seated grievances, a process the UN head in Somalia calls “a breathtaking feat of political engineering.” Without committed reconciliation to rebuild trust between people, state building is not likely to be sustained in Somalia.

The Multi-Partner Fund has received financing from the WBG’s State and Peacebuilding Fund, as well as from other development partners, including the United Kingdom, Sweden and the European Union. Discussions with other donors are ongoing.

“This grant from the Multi-Partner Fund highlights our government’s commitment to fully finance its 2014 budget and the commitment of our international partners to increase use of our country systems in their support,” said Hussein Abdi Halane, Somalia’s minister of Finance.