Early this year, the United Kingdom Government and the European Union helped Somalia in settling arrears with the African Development Bank which paved way for the lifting of a 30-year-old sanction imposed by the bank.
To mark the reunion, the Bank Vice President for Regional Development, Integration and Business Delivery, Khaled Sherif and Somali Finance Minister Abdirahman Beileh signed a $122.55 million grant.
With assistance from the Bank and other development partners, the shift to a new Somalia can speed its national development agenda of consolidating peace, fighting poverty and ensuring growth.
“We stuck with our reforms, we were persistent, and it has paid off,” Minister Beileh said.
IMF Staff Monitored Programs (SMPs) driven reforms restored the confidence of the bank and led the United Kingdom and the European Union to provide funding for clearing Somalia’s loan arrears to the Bank.
“I am absolutely delighted that the African Development Bank provided the leadership needed to push for and successfully negotiate the arrears clearance for Somalia. It was a reflection of the power of partnerships and consensus-building,” Bank President Akinwumi Adesina said.
Despite the Bank’s sanction since 1990, the bank has continued to provide governance and technical support to Somalia through Transition Support Facility, the African Development Fund and other special funds including Africa Legal Support Facility Green Environment Fund, Special Relief Funds, African Water Facility, RWSSI and the Multi-Partner Somalia Infrastructure Fund.
The AFDB’s Board approved two projects worth $10.2 million in July 2015 and December 2017 to support economic and financial governance reforms as well as boosting Somalia’s revenue mobilization.
The target is to raise revenue collection levels from the current 1.9 per cent of GDP to 2.5 per cent by 2020.
“The Bank’s contribution to strengthening our revenue mobilization and institution building is evident through these investments, which will enhance our capacity to collect domestic revenue,” Beileh said.
African Development Bank (AFDB) portfolio in Somalia totals $298 million distributed in agriculture, transport, water and sanitation, social and energy and multi-sectoral projects.
The bank’s portfolio includes more than $122 million approved in February this year from the Economic and Financial Reforms Support Program (EFRSP).