Mogadishu, Aug 1 The World Bank has approved a 125-million-US Dollar grant for Somalia to introduce drought index insurance for 180,000 pastoralists including 90,000 women.
The Development Policy Financing (DPF) is the first of two operations aimed at boosting revenue, enhancing debt management and accountability of public spending, and increasing climate-smart private sector investments.
"This DPF signals the government's commitment to continuing important structural reforms following the Heavily Indebted Poor Countries Completion Point, paving the way for a more stable and sustainable future," said Kristina Svensson, the World Bank country manager for Somalia, in a statement released Wednesday evening.
The World Bank said the program will facilitate access to microfinance for lower-income groups including pastoralists that operate mostly in climate-vulnerable sectors of the economy such as agriculture, fisheries, and micro businesses.
The DPF also seeks to expand access to greener and cost-effective electricity, support fisheries development to harness new sources of economic growth and assist the government in funding crucial public services using resources from the grant.
The approval of the grant comes at a time when Somalia continues to grapple with multiple and overlapping shocks that hinder economic growth and exacerbate widespread poverty, Xinhua news agency reported.
According to the World Bank, Somalia ranks as the world's second most vulnerable country to the impacts of climate change, and projections for temperature rise have the highest certainty.
Climate change is exacerbating the frequency and severity of periodic droughts and floods in Somalia, which are intricately intertwined with the country's social and political vulnerabilities, said the global lender.
Stella Ilieva, task team leader and senior economist, said the sustainability of public finances, supported by the DPF, is critical for ensuring economic resilience. "Actions to strengthen domestic revenue mobilization, manage better public debt, and enhance accountability of public spending create the building blocks for adequate funding for development and contribute to macroeconomic stability," Ilieva said.
According to the lender, the reforms supported in this operation complement the World Bank's broader engagement in Somalia and are aligned with the objectives of the World Bank's Country Partnership Framework for Somalia (FY24-28).
"The proposed series is part of the World Bank's support to help Somalia construct a more stable, visible, and legitimate state, foster inclusive private sector-led growth, and enhance resilience, with a long-term view to restoring the social contract and enabling Somalia's emergence from fragility, conflict, and violence," it said.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor