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July 24, 2019
Opinion

SOMALIA’S ECONOMIC GROWTH TRAJECTORY TO BE BOOSTED BY RELIANCE ON ECONOMIC REFORMS AND PARTNERSHIPS

Somalia’s partnership Framework (CPF) for the year 2019 to 2022 reflects the progress in economic reforms and institution building since 2013.

According to Bella Bird, who is the country director for Tanzania, Burundi, Malawi, and Somalia, World Bank aims at helping Somalia rebuild core institutions that can restore citizens’ trust while redistributing resources to address extreme poverty.

The federal Government of Somalia’s (FGS) strengthened tax administration, which resulted in increased domestic revenue, which reached $184 million in 2018 (almost 30 percent higher than in 2017) and $54 million for the first quarter of 2019.

For her, as the country is recovering from civil war, which ravaged its economy big time, and dimmed major state institutions like the Ministry of Finance, the Central Bank, and the National Statistics Office, of importance is the creation of opportunities particularly for those who have been seemingly excluded.

“For this CPF, our focus is to support Somalia’s institutions to extend their reach in providing services to citizens and to scale up our interventions that will open up economic opportunities,” Bird says.

In line with the World Bank’s efforts to build economy and institutions in Somalia, this strategy will help boost service delivery, build resilience to climatic shocks, thereby increasing economic opportunities in Somalia.

Milestones achieved over the last five years show that great things are yet to come. Of course, the current economic reforms are working, so it seems, but what does the future hold for the Horn of Africa country?

Taking advantage of this re-engagement to grow means that the federal government, as well as the federal member states, must outthink as far as making progress in building institutions and improving economic performance is concerned, engagement with the private sector, legislation and revenue mobilization will be among the key areas to focus on.

Despite tough economic times, the first four-year CPF for Somalia pushed by World Bank which has approved $80 million in grants to Somalia to fund public finance reforms, marking the first disbursement to the government in 30 years.

Allison Holland with the International Monetary Fund (IMF) said, “Somalia’s economy continues to recover, supported by vigorous activity in the construction, telecommunications, and financial services sector in 2018.”

According to International Monetary Fund (IMF), the Federal Government of Somalia’s (FGS) strengthened tax administration, this resulted in increased domestic revenue, which reached $184 million in 2018 (almost 30 percent higher than in 2017) and $54 million for the first quarter of 2019.

It is not easy making all the partnership promises become a reality. But one thing stands out continued funding of the CPF will help increase revenue, build the capacity of municipalities for urban resilience and improve delivery systems for more inclusive social services.

In addition, it will improve the business environment while increasing access to finance for greater inclusion and increase access to energy and water for the people of Somalia at large.

 

 

“Somalia provides a global example for how the Bank can operate in the most challenging contexts where our help is needed most,” said Hafez Ghanem, Vice President of the World Bank for Africa. “Somalia’s stability and prosperity are key to the stability of the region as a whole.

We applaud the government for their commitment to reform and the steps taken towards building a better future for the country.”

As the collaborative relationship brought about by CPF continues to take shape, the impact is being seen both by the government and the private sector.

It is due to the opportunities available that the country is now beginning to get on its feet, leveraging its strengths by creating an enabling environment for greater economic growth and inclusion.

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