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Somalia has secured a significant grant from the African Development Bank to enhance its domestic revenue generation and streamline public spending.
The Board of Directors of the African Development Bank Group approved a grant of $13.29 million for Somalia on October 2, 2023. This funding is allocated for the Institutional Support for Economic Governance Project, aimed at improving domestic revenue mobilization and enhancing public expenditure management.
The grant includes $9.31 million from the resources of the African Development Fund, which serves as the Bank Group’s financing window for low-income countries. Additionally, $3.98 million is provided from Pillar 1 of the Transition Support Facility, specifically designed for fragile states.
The project’s core objectives encompass the provision of technical assistance, training, and tools to enhance Somalia’s capacity for domestic revenue mobilization. It also focuses on building institutional capabilities at all levels of the federal government and Federal Member States. Moreover, the project aims to promote inclusive governance and accountability, contributing to greater economic resilience.
The institutional capacity-building aspect of the project will concentrate on optimizing tax collection efficiency and bolstering Somalia’s ability to fund developmental initiatives while maintaining fiscal sustainability.
Various entities within Somalia stand to benefit directly from this project, including the Finance ministries of the federal government and regional entities such as Somaliland, Galmudug, Hirshabelle, Jubaland, Puntland, and South-West. Within the federal government, key beneficiaries include 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. This support is expected to contribute significantly to Somalia’s economic development and financial stability.
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