Sector Context: Somalia’s two-year (2014-15) Economic Recovery Plan (ERP) provides a roadmap for Somalia’s transition from emergency relief to economic recovery by placing among its priorities rapid upgrading of state capacity and rapid rehabilitation of infrastructure (including ports) as well as financial sector regulation and supervision. With regard to the private sector, the government’s vision focuses on the enabling business environment by providing basic infrastructure and effective regulation. The project supports the ERP and the implementation approach is closely aligned with initiatives to strengthen governance in the Central Bank of Somalia (CBS) and the procurement systems under the Financial Governance Program.
Financials Appraised Value: US$ 28.5 m
Component 1: Strengthening CORE Economic Institutions
Strengthen the economic institutions in three critical areas of the economy: (i) central banking, to allow for the emergence of a formal financial sector, which would improve access to finance; (ii) the Ministries of Commerce and Industry, to support the introduction of a basic and more modern legal and regulatory framework that would reduce transaction costs for entrepreneurs; and (iii) local port and customs authorities, to leverage private capital, networks and expertise to improve performance of the port sector.
- Strengthen Central Bank supervision and regulation
- Improve the business environment by reducing the time and cost of starting and operating a formal business
- Develop the port sector in Mogadishu, Kismayo, Marka and possibly Bossaso
Component 2: Expanding Economic Opportunities
Provide direct support to the private sector—through technical assistance and grants—to expand economic opportunities in the country.
- Support the recovery of the private sector by providing matching grants to support small and medium-sized enterprises (SME).
- Promote the development of SMEs through direct and indirect capacity building support.
Component 3: Project Management
Institutional support for project implementation and supervision.
Beneficiaries Primary beneficiaries: Central Bank of Somalia, Ministries of Commerce, port authorities and enterprises receiving the matching grant and connected business support services.
Government Counterparts Ministry of Finance in Mogadishu, Presidency in Garowe, Ministry of Planning and Development in Hargeisa, Central Bank of Somalia, Ministries of Commerce and Industry (Mogadishu, Hargeisa), Port Authorities
Implementation Arrangements Component 1 is mainly Government-executed. Component 2 is executed by the World Bank on behalf of the Government.
Geographic Coverage The geographic coverage includes southern Somalia, Puntland and Somaliland in the first phase. Security permitting, the project interventions supporting the private sector will be rolled out in more areas of the country.
Links to other projects Successor to investments made through the Somali Private Sector Development Re-engagement Program (SOM-PREP I & II)