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World Bank Grants Somalia $55 Million For Reforms
NEWS

World Bank Grants Somalia $55 Million For Reforms

The World Bank’s Board on Tuesday approved a $55 million grant to Somalia’s reform program as the country faces multiple crises. This supplemental funding will help Somalia further policies for fiscal management and promote private sector-led growth as it battles the effects of COVID-19, floods, and a locust invasion.

The new grant will help finance Somali’s revised budget for 2020, allocating funds to response programs for the pandemic. Further, it will increase the distribution of grants to the sub government arms to enhance service delivery. Speaking on the grant, World Bank Country Manager for Somalia Hug Riddell said;

“The budget support will help protect lives and livelihoods and strengthen the capacity of Somali institutions to respond to the triple crisis of COVID-19 pandemic, locust invasion, and flooding that threatens to derail the country’s reform program and its emergence from fragility.”

Last month, the bank gave Somalia a $137.5 million grant to help the country deal with climate emergencies and the pandemic, and promote food security. Then, the funding aimed to protect livelihoods through a cash-for-work scheme and improving hygiene.

Somalia in Urgent Need of Financing

Somali is in dire need of financing, given declines in revenue from the pandemic. The country is experiencing public expenditure gaps given the 29% revenue shortfall, and a shrunken GDP.

“Our revised budget expands cash transfers to vulnerable households and provides a substantial increase in grants to subnational governments to respond to the pandemic in the face of declining revenue. The supplemental financing will help to plug our public expenditure gap, given the 29% domestic revenue shortfall and 2.5% GDP contraction in 2020.”

Dr. Abdirahman Beileh, Minister of Finance

Both grants came from World Bank’s International Development Association, which awards grants and zero-interest loans for programs aimed at poverty alleviation, enhancing livelihoods, and economic growth. Somalia’s entry into the Heavily Indebted Poor Countries(HIPC) Initiative allowed the country to access IDA’s assistance to address its crises.

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