The World Bank approved a $100 million grant to support the continuation of Somalia’s reform efforts in reaching the Completion Point of the Heavily Indebted Poor Countries (HIPC) Initiative when Somalia will be eligible for full and irrevocable debt relief.
The operation supports the government’s efforts to improve fiscal transparency and increase revenues through harmonising customs regimes across the federation and improving the governance of intergovernmental fiscal transfers.
It will help create the building blocks for strengthening intergovernmental fiscal cooperation to enhance the ongoing state stabilization agenda critical for stimulating inclusive economic growth by fostering trust and enhancing financial transparency between the federal government and member states.
As Somalia continues to face climate-related shocks, the program also supports actions to enhance economic resilience and investment in sectors such as fisheries and renewable energy to create jobs and spur growth.
These efforts will help create fiscal space to allow government authorities to respond to the deteriorating drought situation and rising prices for food, fuel, and other staple products. Together, these efforts will help improve the government’s ability to continue to provide cash transfers for the country’s poor and most vulnerable, including women, which are a critical coping mechanism amidst continuing shocks.
“This operation will increase the government’s fiscal space to respond to the drought situation, while continuing to support reforms that advance progress towards attaining debt relief,” said Kristina Svensson, World Bank Country Manager for Somalia.
By supporting a package of policy and institutional reforms that are owned and implemented by the government, this financing is expected to achieve development outcomes that contribute to a sustainable reduction in poverty by promoting growth and enhancing the well-being of poor people.
Over the past two years, police operations have helped improve revenue mobilization and the legal framework for the private sector. For example, the Somali Business Registration and Licensing System (SBRLS) has made it easier and faster for entrepreneurs to register new businesses and obtain licenses.
Read also; ADF Approves $5.4 Million Grant for Somalia.