The African Development Bank (AfDB) has resumed its relationship with Somalia after a break of nearly two decades and has signed a $2 million grant to help the troubled Horn of Africa nation manage its finances.
Somalia has lacked an effective central government for 18 years. The Western-backed administration of President Sheikh Sharif Ahmed is battling hardline Islamist rebels and controls little more than a few strategic sites in the capital Mogadishu.
The Tunis-based AfDB, which signed the deal, said Somalia needed “targeted support” now because it faced a myriad of complex constraints and challenges, including weak governance and the urgent need for humanitarian assistance.
In a statement, it congratulated the Somali government for returning all of its institutions to Mogadishu, as well as for creating a national plan “and the establishment of a functional central bank and effective anti-corruption commission”.
Somalia had been under AfDB sanctions since the early 1990s when it started accumulating arrears on its loan repayments.
The new grant will be administered by the bank’s Fragile States Unit. The head of that department, Margaret Kilo, said in a statement that the agreement was a landmark for both parties.
“(The) signing ceremony is a momentous event and a first step towards Somalia reengaging with the bank after nearly two decades,” she said. “The bank is committed to accompanying the government through the process of reengagement.”
The AfDB said the grant would help Somalia set up sound and transparent public finance systems and develop a legal framework for fiscal and monetary institutions.
Underlining the ongoing turmoil in Somalia, which Western security experts fear is now a safe haven for militants plotting attacks across the region and beyond, at least four people were killed in fighting in northern Mogadishu yesterday.
Residents said al Shabaab rebels were battling government troops and that another 11 people had been wounded.
Fighting in the country has killed 19 000 people since the start of 2007 and driven another 1.5 million from their homes, triggering one of the world’s worst humanitarian emergencies.
The bloodshed on land has also spilled into the waters off Somalia, where bands of heavily armed Somali pirates have made tens of millions of dollars hijacking ships and their crews.
Pic: Lack of infrastructure in Africa