$80 million World Bank grant should focus the Government on holistic reforms – UM

The World Bank Group approved $80 grant to Somalia to strengthen the financial institutions and public infrastructures. Photo: Twitter

Mogadishu (UM) – It was welcome news that the World Bank has approved $80 million in grants to Somalia to fund public finance reforms under the new Country Partnership Framework for 2019-2022. This grant will be used to strengthen the Public financial management, increase the capacity of the Somalia Federal Government to deliver basic services to its people and invest in qualified human capital which the country desperately needs. The historical aspect of this $80 million grant is that it is the first disbursement to the government of Somalia in 30 years and perhaps the first ever given to a highly indebted country like Somalia which does not qualify for loans from the Intentional Financial Institutions until it either pays it debts or receives debt relief. The Somali government is sensibly working towards the latter.

The news of the the Word Bank Grant closely followed the successful IMF SMP Mid-Term review Mission in Nairobi last week which was led by the Minister of Finance Dr. Abdirahman Beileh. In a Statement Villa Somalia stated that the President congratulated the efforts of the Government of Prime Minister Hassan Ali Kheyre for this success. However, the real heroes and winners are the Ministry of Finance and the Central Bank of Somalia whose reforms are leading the way for debt relief. Of course, the Prime Minister is in charge of the Cabinet, but he needs to focus on reforming the other sectors that are crucial to ensuring debt relief is achievable and sustainable such as public services and security which are critical for stability and economic growth. The $80 million USD grant from the World Bank came because the Ministry of Finance and Central Bank are doing their jobs, but this may not be enough if security and political stability do not accompany it. The Somali government must not forget to tell the people that one of the key factors to deciding on whether Somalia get debt relief or not will be its ability to stay out of it in the future with a strong economy guided by an even stronger transparent institutions which are accountable to the people.

The simple fact is that the process of de-risikng Somalia will continue and the grant, in the eyes of the World Bank, is a drop in the ocean. What is urgently needed from this government is to get its politics in order, resolve its relationship with the federal member states and then, make Somalia secure to allow for development. The trust of the international community in Somalia’s financial reforms is clear and it is led by a competent and experienced Finance Minister who is respected by the international community and is clearly putting his country first. The Prime Minister should let him do his job and deal with those who are failing in other key policy areas. A good start for the Prime Minister is the Security sector leadership both politically and operationally. He could also help himself by finally making the brave decision to embark on the civil service reforms he promised a year ago and appoint Director Generals by merit and not clan.

Until the Somali government is able to make the tough political decisions to reform every aspect of policy and governance in Somalia, debt relief will remain a distant dream. The $80 million grant from the World Bank is a good start but Somalia needs billions more to reconstruct and get back on its feet fully. This is an important reminder for the need for holistic national reforms.