World Bank re-establishes relations with Somalia

World Bank vice president says Somalia has made important reforms which lay foundation for sustained poverty reduction as AfDB and ADF approve framework for $122.55 million to clear country's arrears.

WASHINGTON - The World Bank moved Thursday to reestablish relations with Somalia after a 30-year break, paving the way for the country to have access to low-cost development aid.

Contact was severed in 1991 as the country descended into conflict, but recently it has made efforts to rebuild, even as it faces violence from the Al-Shabaab jihadist group.

"Somalia has made important reforms and has demonstrated strong commitment to staying the course," said Hafez Ghanem, World Bank vice president for Africa.

"These reforms lay the foundation for sustained poverty reduction and better lives for the Somali people, and open the door to private sector investment that can create jobs and drive the economy forward," he said in a statement.

This month the African nation has won initial approval from World Bank and IMF to get hundreds of millions in debt relief.

New financing proposals that should be ready in the coming months aim to provide rapid response to households impacted by recent droughts and flooding.

The proposals also aim to reduce poverty by delivering social protection to over 200,000 women with children under 5, it said.

Somalia Finance Minister Abdirahman Beileh said the approval "is a recognition of the ambitious reforms to which this government remains committed, to bring transparency and accountability into Somali institutions and to revive the economy."

The African Development Bank (AfDB) and African Development Fund (ADF) approved Wednesday a framework for $122.55 million to clear Somalia's arrears.

The move paves the way for the Bank Group to fully re-engage with Somalia and open opportunities for enhanced financing for the country.

“Difficulties cannot be allowed to exist forever, because it defeats the very purpose of why we are here to serve,” said AfDB president Akinwumi Adesina.

Beileh said that “The African Development Bank has accompanied Somalia through the difficult reforms, which can only make Somalia a better place for all Somalis,” said Beileh.

“We are committed to continuing our reforms as we have seen their benefits to our governance systems and capacity to manage our economy, and, more importantly, to improving government accountability to the people,” he added.

Almost 70 percent of Somalis live on less than $1.90 a day.