The World Bank announced on Monday that it had given Somalia a 75 million dollar grant to help the nation get closer to debt relief.
The fund, according to the international lender, is the second in a series of two loans that are assisting the nation in moving closer to becoming eligible for complete and permanent debt reduction under the Heavily Indebted Poor Countries (HIPC) Initiative.
In line with the ninth National Development Plan, which outlines numerous priority areas for moving the country forward and some of which are supported by this Development Policy Financing (DPF), it was stated that the government is putting into action an ambitious reform program to create institutions, draw investments, and achieve inclusive economic growth and job creation.
Kristina Svensson, World Bank country manager for Somalia, said in a statement that the DPF supports the government’s aspirations to build the foundations of a modern economy with strengthened institutions. “It also signals the significant progress Somalia has made in terms of institution-building and economic development, paving the way for a more stable and sustainable future,” Svensson added.
The World Bank said Somalia has approved new laws that establish the institutional environment in key sectors such as fisheries and electricity to develop high-potential sectors for economic growth.
It said a new investment and investor protection law was enacted to mobilize much-needed private capital to develop these sectors. “Despite multiple shocks, Somalia is maintaining macroeconomic stability. These institution-building reforms take Somalia closer toward the goal of attaining debt relief, which will wipe away the legacy of loans contracted during the pre-civil war era, thereby turning a new page in the country’s development trajectory.”
Also, a digital identification law was approved, which can support better know-your-customer protocols, alongside a data protection law to provide safeguards on the use of personal data to help increase access to finance, said the World Bank.
According to the World Bank, the DPF supports the building blocks of harmonised customs regimes across Somalia, which can encourage cooperation, increase trade, raise revenues, and simplify procedures for the private sector. “Alongside efforts to implement institutional reforms, Somalia has signed debt relief agreements with major creditors and is holding discussions with some remaining bilateral and multilateral creditors,” it said.