This archive report was first published on 24 June 2020.
On Tuesday, the World Bank's Board approved a $55 million grant to Somalia's reform program, providing crucial support to the country as it battles the effects of COVID-19, floods, and a locust invasion.
The grant, which will help finance Somalia's revised budget for 2020, aims to promote private sector-led growth and enhance service delivery through increased distribution of grants to sub-government arms.
According to World Bank Country Manager for Somalia Hug Riddell, the grant will help protect lives and livelihoods and strengthen the capacity of Somali institutions to respond to the triple crisis.
Speaking on the grant, 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."
As Somalia faces a 29% revenue shortfall and a shrunken GDP, the country is in dire need of financing. The revised budget expands cash transfers to vulnerable households and provides a substantial increase in grants to subnational governments to respond to the pandemic.
Dr. Abdirahman Beileh, Minister of Finance, noted that the supplemental financing will help to plug the public expenditure gap, given the 29% domestic revenue shortfall and 2.5% GDP contraction in 2020.
Both grants came from the 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.
