World Bank Group Supports Public Private Dialogue to Spur Economic Recovery in Somalia

LONDON, May 11, 2017– On the sidelines of the UK-hosted Conference on Somalia, the Somali government and high level business actors endorsed a Public-Private Cooperation Agreement to Accelerate Somalia’s Economic Recovery. The event was supported by the World Bank Group and the British Department for International Development (DFID) and was opened by His Excellency Mohamed Abdullahi “Farmaajo”, President of the Federal Republic of Somalia and Rt. Hon Priti Patel, UK Secretary of State for International Development.

The Agreement is a combination of priority actions, principles and processes for delivery of economic priorities, and a commitment from development partners to align their focus to Somalia’s new National Development Plan 2017-2020.

Opening the event, H.E. Mohamed Abdullahi Mohamed “Farmaajo” recognized the importance of creating the right conditions for investment: “Our Government needs to provide the right governance environment for the private sector to grow, and provide jobs to our people. My Government and I are committed to strong collaboration between the public and private sector, as well as our development partners, to create a new, irreversible chapter in the economy of our country”.

In her opening remarks, Bella Bird, World Bank Country Director for Tanzania, Malawi, Burundi and Somalia, said ““The current drought has amplified Somalia’s vulnerability and the urgent need for investments to enable full economic recovery and lay the foundations for future prosperity. This event has identified clear areas of priority investment where the public and private sectors can work together to accelerate economic progress among them: energy; water and financial services. We congratulate both the government and private sector.”

Somalia faces a disastrous drought and is constrained by limited state and institutional capacity. Nevertheless, the Somali private sector has remained vibrant and contributes over 90% of GDP, including through remittance flows of around USD 1.5 billion per annum. The ICT sector makes up a significant portion of private sector activity, providing the continent’s cheapest phone rates, full domestic mobile network coverage, an expanding 4G network, and more mobile money transfers than cash transactions. President Mohamed’s newly-elected administration has expressed a commitment to engaging with Somalia’s vibrant private sector, both locally and in the diaspora, to support the country’s next stage of development.

Cheick Oumar Seydi, Director for Africa, International Finance Corporation, said “Officially recognizing private sector’s resilience and key role in Somalia is a major milestone. IFC will apply its knowledge and extensive global networks to support Somalia’s government and private sector in their efforts towards economic recovery. The World Bank Group is already working to improve government to business services, which will help the private sector formalize and access global markets”.

Participants in the dialogue discussed priorities for Somalia’s recovery, which are identified in the country’s National Development Plan, as well as continuing the public private dialogue (PPD) process with support from the World Bank Group and other partners. During the dialogue, private sector representatives highlighted the business opportunities in Somalia as well as the challenges such as insecurity, weak government capacities, an informal financial sector; need for currency reform, effective fiscal policies and public sector accountability.

“The Government affirms its responsibility to develop and strengthen regulatory frameworks and policies, in consultation with the private sector, to enable private sector led economic recovery that benefits all Somalis. The Private Sector will actively engage with the government to progressively establish a modern business environment based on rule of law and a fair, predictable and competitive taxation system”, said Mohamed Abdullahi Abdi “Martello”, Spokesperson for the Somali Chamber of Commerce and Industry.

Background on the World Bank Group: 

The World Bank Group, through the Multi Partner Fund, supports a range of state-building initiatives in Somalia, including IFC’s work with the private sector. The Somali Core Economic Institutions and Opportunities Program is developing regulatory and policy framework for Somali financial institution, to catalyze private investment and job creation across Somalia. Efforts are also underway to set up a One-Stop-Shop for business registration and support value chains in fisheries, gums and resins.

The Multi Partner Fund is supported by the United Kingdom’s Department for International Development (DfID) as well as, Danish International Development Agency (DANIDA), the European Union (EU), the Ministry of Foreign Affairs of Finland, Italy’s Ministry of Foreign Affairs and International Cooperation, the Swedish International Development Cooperation (SIDA), the Swiss Agency for Development Co-operation (SDC), the Royal Norwegian Embassy, United States Agency for International Development (USAID), and the World Bank’s State- and Peacebuilding Fund (SPF).

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org

SOURCE:WORLDBANK