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World Bank restores financial ties with Somalia after 30-year hiatus

Mar 1st 2020 ยท 1 min read

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

The World Bank said the move to normalize its relations will open up opportunities for Somalia to access concessional financing from the Bank's International Development Association (IDA) and to work closely with all arms of the World Bank Group to attract investment that will support the country's stability and development.

Axel van Trotsenburg, World Bank managing director of operations, said the decision paves 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, and 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 in a statement issued on Thursday evening.

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 mobilization, 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 has also focused strong attention to building core monetary and financial sector governance institutions, establishing the basic legal foundations for a market economy, and introducing reforms in strategic sectors including telecommunications, banking, and energy.

The normalization of relations with the World Bank also paves the way for Somalia to receive debt relief under the Heavily Indebted Poor Country (HIPC) and Multilateral Debt Relief Initiative (MDRI) programs to promote growth and recovery over the coming years.

Somali finance minister, Abdirahman D. 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.

last updated: 2020-03-01@06:03