Somalia set to receive $75 million to enhance Resource Management, Bolster state legitimacy

The World Bank approved $75 million in financing for the Somalia Enhancing Public Resource Management Project (SERP), which aims to support Somalia as it builds strong Democratic governance system.

The financing will reduces institutional fragmentation and strengthen government institutions for improved service delivery.

The initiative is co-financed by both an International Development Assistance (*IDA) grant and a grant from the Somalia Multi-Partner Fund.

Although the long-term growth of the Somali economy continues to be held back by various climate-related shocks such as drought and floods, the COVID-19 pandemic, and frequent locust infestations, Somalia is working on tinting the page on decades of conflict, fragility, and state fragmentation and accerlerate poverty reduction and boost inclusive growth.

To help Somalia improve the capacity of its institutions and increase transparency and accountability in managing public resources will build on the success of previous operations.

It is also designed to establish coordination mechanisms at different levels, engage closely with all stakeholders, and balance the advanced and ambitious governance agenda of the government with the requirements and challenges of a fragile, conflict-affected, and violent (FCV) environment.

“This project is an opportunity to consolidate and build on the reforms put in place through previous World Bank interventions,” said Kristina Svensson, World Bank Country Manager for Somalia.

“It will also address synergies and interlinkages between the existing programs throughout Somalia and will help the government achieve a harmonized agenda, which is essential for transparency as fiscal decentralization becomes established,” said Svensson.

The project’s main objective is to strengthen accountability, transparency, and institutional capacity in public resource management across participating entities by leveraging synergies between various reform elements in a symbiotic manner.

 

This will be done by putting in place a coherent, consistent, and sustainable reform agenda for managing public finances and Human Resources in Mogadishu and across all the five federal member state.

The improved outcomes of this integrated approach to reforms will contribute to greater trust in fiscal management.

This will help the government decisively deal numerous prevailing challenges, such as weak capacity, asymmetric federal structures, security concerns, human capital deficits, and low levels of state legitimacy.

The approved budgetary by the World Bank will also offer an opportunity to enhance systems, staff skills, and effectiveness of civil service management to improve government capacity to deliver services to citizens.

According to a World Bank 2019 report, nearly 70 percent of the population lived below the poverty line.

The global  COVID-19 pandemic, locusts, and floods, as well as the war in Ukraine have further caused significant economic damage. 

“The initiative will incorporate the lessons we have learned through recent engagement in Somalia and will therefore help the country achieve consistency, harmonization, economies of scale, and interoperability in managing public resources,” said Jiwanka B. Wickramasinghe, World Bank Senior Financial Management Specialist.

“It is designed to work across Somali governments so as to sustain a positive trajectory that will require predictable financing and improved institutions (among other factors) and that prepares for future financing opportunities once the country will be eligible for full and irrevocable debt relief.”

For Somalia to address the broader challenges it is faced with, it will require continuing the reform momentum, anchored in the heavily indebted poor countries initiative that is set to help Somalia regain control of its financial freedom.

 

The government has embarked on a broad reform agenda in the areas of public finances and public sector management.

Several gains have been made such as an updated legal and policy framework, automation, large and medium taxpayer offices and taxpayer identification in operation, and functional reviews completed in selected ministries, departments and agencies.

Despite substantial political and security challenges, the Federal Government of Somalia (FGS) and the Federal Member States (FMS) are being established.

The two inter-government organizations are now tasked with spearheading efforts to provide better services to the Somali people who last saw developments projects thirty years ago.

Somalia’s Federal System which was believed to be the best solution to propel the nation from the dark remnants of President Siyad Barre’s military regime toppled in 1991 to one of the emerging economies, has itself not picked.

Previously, unnecessary political tensions stalled reform efforts key to advancing human rights in the country, while conflict-related abuses, insecurity, and humanitarian and health crises took a heavy toll on civilians.

 

Elected in May, President Hassan Sheikh Mohamud’s government is facing a number of long-running governance projects and challenges.

High on the list for Somalia’s international partners will be to see the new administration complete a review of the provisional constitution, with the aim of finalising the document.

Related tasks include developing the surrounding framework, building out the judicial services and human rights commissions and establishing a constitutional court.

Dr. Hassan Sheikh Mohamud will also need to continue economic reforms, such as improving public financial management and increasing domestic revenue mobilisation to attain full debt relief and begin exploring electoral reforms to set the stage for the next round of national elections in 2026.

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