World Bank restores financial ties with Somalia after 30 years

World Bank President, Mr Jim Yong Kim

The World Bank said it had re-established relations with Somalia after a 30-year break, paving the way for the country to have access to development aid.

Axel Trotsenburg, the World Bank Managing Director of Operations, said this in a statement issued on Friday in Mogadishu.

The World Bank said the move to normalise its relations will open up opportunities for Somalia to access concessional financing from the bank’s International Development Association (IDA).

It will also enable the country to work closely with all arms of the World Bank Group to attract investment that will support the country’s stability and development.

Trotsenburg said the decision would pave the way for the full resumption of operations so the lender can provide the strongest possible support to Somalia’s efforts toward economic and social recovery.

“This milestone is the result of several years of close cooperation with the Federal Government.

“We now look forward to taking our relationship to the next level with deeper and broader financial and technical support from across the Bank Group,” Trotsenburg said.

The lender said its decision to reengage is based on the government’s strong record of fiscal, political, social and economic reforms in recent years.

It said Somalia’s fiscal management agenda now covers revenue mobilisation, budgeting, procurement, auditing, and cash management, as well as accountability over Public Financial Management.

“Somalia has made important reforms and has demonstrated strong commitment to staying the course,” Hafez Ghanem, Vice President for Africa, the World Bank said.

“These reforms lay the foundation for sustained poverty reduction and better lives for the Somali people, and open the door to private sector investment that can create jobs and drive the economy forward,” Ghanem added.

The World Bank said Somalia had also focused strong attention to building core monetary and financial sector governance institutions as well as establishing the basic legal foundations for a market economy.

Others are introducing reforms in strategic sectors including telecommunications, banking, and energy.

The normalisation of relations with the World Bank also paves the way for Somalia to receive debt relief under the Heavily Indebted Poor Country (HIPC).

Also Multilateral Debt Relief Initiative (MDRI) programmes to promote growth and recovery over the coming years.

Somali Finance Minister, Abdirahman Beileh welcomed the move, saying it is a recognition of the ambitious reforms to which this government remains committed, to bring transparency and accountability into Somali institutions and to revive the economy.

“We are grateful to the bank for the support they have already provided to help the country reach this point and we look forward to planning a new phase of investments to deliver the poverty reduction. (Xinhua/NAN)