The Federal Republic of Somalia has made significant progress in recent years, consolidating its federal system of governance, strengthening capacity of government institutions and supporting inclusive private sector-led growth, while leveraging the momentum created by the Heavily Indebted Poor Countries (HIPC) Initiative. Despite multiple climatic shocks and a complicated security situation, Somalia continued advancing structural reforms and maintained a track record of sound macroeconomic management, as evidenced by the satisfactory implementation of the International Monetary Fund (IMF) Extended Credit Facility (ECF) program. A three-year ECF arrangement, approved in December 2023, is supporting Somalia’s post-HIPC economic agenda with the Executive Board of the IMF concluding the third review in July 2025. However, increased uncertainty due to the expected reduction in official development assistance poses a significant challenge. Political relations in the region have changed, with new opportunities for Somalia to benefit from regional trade integration, as it became the eighth member of the East African Community in March 2024.

The World Bank in Somalia operates in partnership with UN agencies and donors, including Canada, Denmark, the European Union, Germany, Italy, Norway, Sweden, Switzerland, United Kingdom, United States, and the World Bank State and Peacebuilding Fund, which supports the Somalia Multi-Partner Fund (MPF). Established in 2013 to support government-led state building (at both federal and state levels), economic growth, and urban development, as well as to help normalize Somalia’s relations with international financial institutions (IFIs), the MPF has supported implementation of Somalia’s Ninth National Development Plan 2020–2024 (NDP9) and was the primary source of financing for the World Bank Group’s (WBG) early re-engagement in Somalia, after more than two decades of disengagement, and has been extended to June 2028.

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