The African Development Bank has taken another step towards supporting the economic development of Somalia by approving a $13.29 million loan.
The funding will be utilized to enhance the country’s domestic revenue mobilization and public expenditure management. This move comes as part of the Institutional Support for Economic Governance Project initiated by the AfDB.
The primary focus of this project is to provide technical assistance, training, and tools to strengthen Somalia’s domestic revenue mobilization and build institutional capacity across all government levels. The $13.29 million grant consists of $9.31 million from the African Development Fund and $3.98 million from Pillar 1 of the Transition Support Facility for fragile states.
One of the key aims of the project is to improve the efficiency of tax collection, allowing Somalia to generate adequate funds for vital developmental investments while ensuring the country’s budgetary sustainability. By enhancing domestic revenue mobilization, Somalia will be better equipped to finance crucial infrastructure development and maintain economic viability.
The targeted beneficiaries of this project are the Finance ministries of the federal government and various Federal Member States, including Somaliland, Galmudug, Hirshabelle, Jubaland, and South-West. Within the federal government, several departments will benefit from the grant, including the Revenue Department, Debt Management Department, Budget Directorate, Public Procurement Department, Office of the Accountant General, Internal Audit Department, Ministry of Transport and Aviation, Ministry of Ports, and the Parliament.
In addition to supporting revenue mobilization, the project also aims to foster inclusive governance and accountability for greater economic resilience. By strengthening institutional capacity at all levels, it is anticipated that the project will contribute to the overall stability and growth of Somalia’s economy.
The AfDB’s decision to provide financial support to Somalia reflects the organization’s commitment to promoting inclusive economic development and supporting countries in need. The grant will undoubtedly play a crucial role in boosting Somalia’s revenue and expenditure management, paving the way for sustainable economic growth and development.
With this injection of funds, Somalia can now invest in the necessary resources, training, and tools required to enhance its domestic revenue mobilization efforts. By improving tax collection efficiency and building institutional capacity, Somalia will be better positioned to finance developmental projects and improve the living standards of its citizens.