NAIROBI, October 2, 2015—The Government of Somalia has launched the second phase of a project designed to improve the reliability and transparency of financing for critical civil service operations and service delivery.
The second Recurrent Cost and Reform Financing (RCRF) Project, which was launched in Nairobi today, will use a $24 million World Bank-administered grant to enable the government to develop a more credible, sustainable payroll system for civil servants, with special focus on expanding service delivery in the health and education sectors. The financing, provided by development partners through the Bank-administered Multi-Partner Fund (MPF), will lay the foundation for an inter-governmental fiscal framework with eligible administrations and federal member states.
“This project has and continues to be instrumental in supporting the Federal Government of Somalia and our regional member states,” said H.E. Mohamed Adan Ibrahim, Somalia’s Minister of Finance. “With the continued support of our development partners, we will continue making major strides to strengthen our federal and regional institutions and their fiscal relations, thus advancing our state and peace building goals.”
The Ministers of Finance from the Federal Government, Puntland and Jubbaland State of Somalia were meeting in Nairobi with development partners to review progress achieved during the first phase of the RCRF and initiate the second phase.
The new project will support eligible civil service salaries in non-security sectors and operational costs for the core government functions of selected ministries, departments and agencies. It will finance salary costs on a declining scale with the objective that the government will ultimately finance all civil service salary payments from its domestic revenues.
“The RCRF is designed to support the federal and regional governments to achieve performance benchmarks and improve service delivery for citizens,” said Bella Bird, World Bank Country Director for Somalia. “It will play an important role in supporting the development of intergovernmental fiscal relations and represents an essential part of Somalia’s state- and peace-building process.”
The MPF under which the RCRF is funded was established for New Deal implementation in Somalia. Six donors have pledged approximately $165 million, which includes new contributions from the European Union and Italy signed at the project launch. The EU’s additional €19.5 million increased its total contribution to the MPF to €41.25 million.
“The RCRF is also about building trust between the donors, the Federal Government and the regional administrations. It contributes to building coherent and collaborative systems to channel funds to the regions,” said Daria Fane, Head of EU’s Development Cooperation. “Without such agreement, donor support would be very fragmented.”
The donors supporting the initiative include the EU, Italy’s Ministry of Foreign Affairs and International Cooperation, the Royal Norwegian Embassy, the Swedish International Development Cooperation (SIDA), the Swiss Agency for Development Co-operation (SDC), the United Kingodom’s Department for International Development (DfID), and the World Bank State- and Peacebuilding Fund (SPF).
The RCRF made the first fiscal transfers from the Federal Government to the Interim Juba Administration under this program in September. It builds on the work of the Special Financing Facility (SFF) funded by Norway. Established in September 2013, the SFF was a temporary bridging mechanism, and has helped to jump-start the public financial management reform process by initiating transparent accounting and accountability systems and procedures.
“The SFF has been phased successfully to the World Bank’s Recurrent Cost Program. It is timely that the coverage is now expanded to also include intergovernmental fiscal transfers, to the regions as well to teachers and health workers,” said Conrad Rønneber, Norwegian Ambassador to Somalia.
About the New Deal:
The New Deal is a 2011 global policy agreement between fragile and conflict-affected states, development partners and civil society to better manage risks, increase the use of country systems and improve the predictability of aid. The Peacebuilding and State-building Goals for New Deal implementation in Somalia are laid out in the Somali Compact, along with a set of principles for partnership.