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Nairobi, November 28, 2009 – The African Development
Bank (AfDB) has granted two million U.S. dollars to Somalia to provide
financial and technical assistance to Public Financial Management after
decades of interruption.
A statement from AfDB said on Tuesday the support to the Transitional
Federal Government of Somalia comes from the Fragile States Facility (FSF)
administrated by the Bank's Fragile States Unit.
The Bank said the grant will also help the country establish sound and
transparent public financial systems and develop an appropriate legal
framework for fiscal and monetary institutions as well as human and
institutional capacity.
Nono Matondo-Fundani, AfDB Country Director for Somalia, said the Bank
"congratulates the Government of Somalia for ensuring that all
government institutions are now based in Mogadishu, the formulation of a
national plan and the establishment of a functional Central Bank and
effective anti-corruption commission".
Matondo-Fundani added that the Bank appreciates Somali government
efforts to normalize the security situation.
"We were an active member of the African Development Bank before, and we
are excited to be back in business with the Bank. We can assure the Bank
that we will make good use of the 2 million dollars grant to strengthen
our financial sector and my government is committed to transparency and
accountability," Somalia's Finance Minister Hassan Cheikh Issak said.
Head of the Bank's Fragile States Unit, Margaret Kilo, said "Today's
signing ceremony is a momentous event and a first step towards Somalia
reengaging with the Bank after nearly two decades."
"The Bank is committed to accompanying the government through the
process of reengagement," Kilo added.
Somalia has been under sanctions with the Bank Group since the early
1990s when it started accumulating arrears on its loans repayments.
Although the Bank had suspended its operations in the country because of
the sanctions, it remained engaged in the provision of humanitarian
assistance.
Given Somalia's complex political volatility, its prevailing fragile
security situation and the deteriorating social and economic situation,
there is currently no clear solution to the country's arrears problem.
To date, the most feasible option for the Bank's engagement in Somalia
is through the Fragile States Facility (FSF) which provides financial
resources to Bank Group Regional Member Countries under sanctions.
"In October 2009, following the government's request to the AfDB to
assist in rebuilding financial management, the Bank approved a grant of
two million dollars from the Targeted Support Window of the FSF," the
Bank said.
This window, it said, was designed to provide targeted support for
technical assistance and knowledge management.
The Transitional Federal Government is the internationally recognized
government of Somalia.
The country currently faces several complex constraints and challenges,
among which are the urgent need for humanitarian assistance, weak
governance, eroded state organs, low government capacity, and a
pronounced lack of capacity to deliver basic social services.
Somalia is defined as a Least Developed Country and is one of the ten
poorest countries in the world. About 60 percent of Somalia's economy is
based on agriculture.
Somalia is a fragile state with hundreds of thousands of refugees due to
massive floods and the latest fighting in the country's civil war.
Due to the lack of government oversight and data, and the recent war, it
is difficult to get an accurate picture of the country's economic
situation.
Source: Xinhua, Nov 24, 2009
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