Somalia - Strenghtening PFM and Debt Management Project

Project Summary

Approval Date	29 Nov 2021
Signature Date	03 Mar 2022
Planned Completion Date	31 Dec 2024
Sovereign / Non-Sovereign	Sovereign
Sector	Multi-Sector
DAC Sector Code	15124
Environmental Category	3
Commitment	U.A 2,000,000
Status	Implementation

Project General Description

The project is critical to support FGS to ensure more efficient PFM practice that will be needed to handle the increased external support and complexity of development financing that Somalia may receive after reaching the HIPC completion point. Somalia has made good progress in the area of financial transparency and accountability; but further action is still needed. A basic fiscal framework - supported by an annual budget process, regular fiscal reporting and improved cash management capacity - has been established by the FGS. The overall Ibrahim Index of African Governance (IIAG) score improved from 8.0 out of 100 in 2013 to 19.2 in 2019. However, the Bank’s CFRA conducted in 2020 has identified five PFM challenges and fiduciary risks: (i) instituting PFM fundamentals for budget credibility; (ii) effective budget execution and financial accountability; (iii) improving policy formulation, planning and budget preparation; (iv) institutional structures; and (v) sound public debt management and transparency. In addition, essential central institutions such as the Ministry of Finance (MoF) and other ministries suffer from significant capacity deficiencies due to inadequate physical infrastructure, and financial and human capital resources. Addressing these identified areas require significant technical and financial assistance, given the current tight fiscal space, with extremely limited capacity to raise revenue. Therefore, this operation is in line with addressing the challenges identified in the CFRA.

Project Objectives

The overall goal of the project is to improve Somalia’s PFM and debt management capacity for greater economic stability and resilience. The project is structured around three main operational objectives: (i) promote effectiveness and efficiency in the internal and external audit oversight functions to ensure improved budget planning and execution oversight in the public sector; (ii) strengthen institutional capacity for transparent and accountable results-based PFM; and (iii) strengthen debt management framework and greater transparency to achieve enhanced transparent and sustainable debt management.

Beneficiaries

The direct beneficiaries of the project will be the Departments in the Ministry of Finance (Internal Audit, and Debt Management Unit); Office of the Auditor General, and MDAs officials involved in PFM activities. The project will ultimately indirectly benefit all citizens of Somalia through building the weak human and institutional capacity in public debt management and promoting good economic governance. The ultimate result is increased resources available to finance the provision of public goods and services, investments in development programs, enabling recovery and relieving poverty.

Participating Organization

Funding

Fragile States Facility

Implementing

GOVERNMENT OF SOMALIA MINISTRY OF FINANCE

Information

IATI identifier	46002-P-SO-KF0-013
Last Update	02 Oct 2022

Export

Contact Details

Name	ALAMIR AHMED Mosllem Ahmed
Email	m.ahmed@afdb.org

Geographic Location

Country	Somalia

Coordinates	Location Name
2.03711 45.3438	Mogadishu

Project Classification

Finance Type	Aid Grant Excluding Debt Reorganisation
Flow Type	ODA
Aid Type	Other Technical Assistance

Commitments

U.A 2,000,000

Fragile States Facility

U.A 2,000,000

Disbursements

Document Type	Language	Document
Expression of interest	en	viewer
General Procurement Notice	en	viewer
Appraisal report	en	viewer
Evaluation Report	en	viewer
Contract	en	copie de strengthening pfm and debt management project simplified pp 2022

Indicator	Indicator Measure	Target Year	Target Value	Actual Year	Actual Value
MO Ibrahim Index (Public Administration)	Index (1-100)	2021	8	2022	5,8
Indicator Country Policy and Institutional Assessment (CPIA) -Debt Policy	Scale (1-6)	2021	2,5	2022	2
Guideline material and, business processes for the internal audit developed and adopted	None	2021	Yes	2022	Guideline material, business processes, including roles and responsibilities, forthe internal audit mandated by the PFM act developed and adopted
Internal Audit Oversight Units within the MDAs established	Number	2021	5	2022	1
Internal audit staff trained/sensitized on the new audit Operating Procedures Manual (COPM) risk-based audit methodology and its application in the conduct of audits	Number	2021	60	2022	19
Internal audit staff trained/sensitized on the new audit Operating Procedures Manual (COPM) risk-based audit methodology and its application in the conduct of audits - of whom women	Number	2021	12	2022	9
Public sector officials’ skills and competencies on internal audit oversight functions enhanced	Number	2021	50	2022	10
Public sector officials’ skills and competencies on internal audit oversight functions enhanced - of whom women	Number	2021	10	2022	2
External audit oversight functions enhanced	Number	2021	30	2022	0
External audit oversight functions enhanced - of whom women	Number	2021	6	2022	0
Public investment management capacity building manual developed	None	2021	Public investment management training manual prepared	2022	Public investment management training manual is not in place
Public investment management capacity enhanced	Number	2021	40	2022	0
Public investment management capacity enhanced - of whom women	Number	2021	8	2022	0
Capacity of MDAs Senior officials in PFM enhanced	Number	2021	50	2022	0
Capacity of MDAs Senior officials in PFM enhanced - of whom women	Number	2021	10	2022	0
A new Medium-Term Debt Management Strategy developed	None	2021	A new Medium-Term Debt Management Strategy developed	2022	Medium-Term Debt Management Strategy not in place
Debt statistics, recording, monitoring, and reporting, using credible debt systems enhanced	Number	2021	12	2022	0
Debt Management Procedures and Operations Manual developed and adopted	None	2021	Debt Management Procedures and Operations Manual developed and adopted	2022	Finalization of the debt management procedures and operations manual is still on track
Public sector officials’ skills and competencies in debt management and transparency enhanced	Number	2021	15	2022	4
Public sector officials’ skills and competencies in debt management and transparency enhanced - of whom women	Number	2021	3	2022	0
Project coordination, monitoring and evaluation capacity enhanced	None	2021	Semi-annual progress reports and Annual audit reports prepared/submitted	2022	Traget on progress