PROGRESS REPORT January–June 2022 © 2022 / World Bank This work is a product of the staff of The World Bank with external contributions. The findings, interpreta- tions, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; email: pubrights@worldbank.org. Contact Information World Bank Delta Center, Menengai Road, Upper Hill, P.O. Box 30577-00100, Nairobi, Kenya Tel: +254 20 2936000 Fax: +254 20 2936382 Email: somaliampf@worldbank.org Twitter: @mpf1somalia Cover photo: Mohamed Abdihakim/World Bank Photos inside: Courtesy WBG, UNDP and UNSOM Contents Abbreviations and Acronyms 5 Introduction 7 Portfolio Overview 13 Effective, Accountable Government 13 Enabling Economic Growth 25 Urban Infrastructure 30 Spotlight 33 Enhanced Risk Management 37 Financial Management 38 Montioring Agent 42 Procurement 44 Environmental and Social Risk Management 46 Women’s Safety and Risk Management 50 MPF Financials 55 Looking Ahead 59 Appendices 63 Appendix 1. MPF Monitoring Framework: 2022–2024 63 (A) MPF Operational Performance 63 (B) MPF Results Framework: 2022–2024 64 Appendix 2. Systematic Operations Risk-Rating Tool (SORT): 70 Overview of Ratings for MPF Investment Projects Appendix 3. Status of HIPC Completion Point Triggers 72 Appendix 4. Status of Reform Benchmarks/ 74 Disbursement-Linked Indicators (A) RCRF II Disbursement Status 74 (B) RCRF III Performance-Based Conditions’ Disbursement Status 79 (C) Matrix of SCALED-UP Performance-Based Conditions 82 4 Abbreviations and Acronyms AF Additional Financing AfDB African Development Bank ASA Advisory Services and Analytics BRA Benadir Regional Administration CIP Public Sector Capacity Injection Project CPF Country Partnership Framework CSSP Somaliland Civil Service Strengthening Project CY Calendar Year DRM/PFM Domestic Revenue Mobilization and PFM Capacity Strengthening Project ESF Environmental and Social Framework EU European Union FCV Fragility, Conflict, and Violence FGC Financial Governance Committee FGS Federal Government of Somalia FHW Female Health Worker FMIS Financial Management Information System FMS Federal Member State FY Financial Year GBV Gender-Based Violence HIPC Heavily Indebted Poor Countries Initiative IDA International Development Association IDP Internally Displaced Person IFC International Finance Corporation IFI International Financial Institution IMF International Monetary Fund MDA Ministries, Departments, and Agencies MSME Micro, Small, and Medium Enterprise PFM Public Financial Management PIU Project Implementation Unit PLR Performance and Learning Review RCRF Recurrent Cost and Reform Financing Project SCALED-UP Somalia Capacity Advancement, Livelihoods and Entrepreneurship, through Digital Uplift Project SCORE Somali Core Economic Institutions and Opportunities Program SCRP Somalia Crisis Recovery Project SDRF Somalia Development and Reconstruction Facility SEAP Somalia Electricity Access Project SUIPP Somali Urban Investment Planning Project SURP Somali Urban Resilience Project WBG World Bank Group 5 6 Introduction he Multi-Partner Fund (MPF) for Somalia text of the MPF. The report captures achievements T has been the primary source of financing for the World Bank Group’s (WBG) early reengagement in Somalia after more than two de- and challenges from the reporting period, including the operationalization of the Bank’s Country Part- nership Framework (CPF), IDA reengagement, and cades of disengagement. The MPF was established support for Somalia’s sustained economic reforms in 2013, and since then has supported the process towards Completion Point. The report also captures for normalizing Somalia’s relations with interna- ongoing and upcoming learning and analytical ac- tional financial institutions (IFIs), while building and tivities. strengthening core government systems at both fed- During the reporting period, the protracted politi- eral and state level. In nonaccrual status since 1991, Somalia has not had access to regular development financing from IFIs, including the World Bank’s International Development Association (IDA). Having cleared ar- rears and reached its Heavily Indebted Poor Coun- tries Initiative (HIPC) Decision Point in March 2020, Somalia’s development financing aims to support an ambitious agenda which is central to moving the country towards greater stability and more inclusive development. The strategic alignment of the MPF and the growing IDA portfolio will help in building back better and recover from the impact of the cri- ses facing Somalia. The MPF is helping to double down on our knowledge work and enhancing risk management for our portfolio, in addition to inform- ing the Bank pipeline and, in key strategic areas of reform, co-financing of IDA operations. This World Bank MPF Progress Report covers the period January to June 2022. It provides thematic and project-level updates and identifies the external events of the period that relate to the operating con- 7 Introduction cal and constitutional crisis since 2021 culminated in Implementation of ongoing Bank-financed opera- the election of President Hassan Sheikh Mohamud tions has continued in spite of the political impasse on May 15, 2022. In recent months the President as government officials remained available and has appointed a Cabinet and held an inaugural re- engaged. The Ministry of Finance and the sectoral treat to outline his priorities. At the same time, as the ministries have maintained their technical capac- transition from forces of the African Union Mission in ity, are functioning, and are able to conduct policy/ Somalia (AMISOM) to the African Union Transition sectoral dialogue and to implement projects. The Mission in Somalia (ATMIS) and ultimately to So- Bank’s implementation support teams continued mali national forces is slowly under way, al-Shabab to work with clients on their projects, and disburse- has taken advantage of the political vacuum and ments continue to finance project activities. Project stepped up attacks since the new government as- Implementation Units operated normally and remain sumed office. Notwithstanding these challenges, adequately staffed. Several implementation support, however, Somalia has made headway on improv- preparation, appraisal, and closing missions have ing core institutions and significant progress toward been conducted since January 2022, with most mis- HIPC Completion Point triggers. 1 sions being held face-to-face. Somalia remains vulnerable to external shocks, Engagement with the new government started putting recent investments and progress on resil- in earnest with the publishing of the Collection of ience to a hard test. The ongoing drought is a key Policy Notes for the New Somali Government. The driver of the humanitarian need which, by the end objective of this collection of policy notes is to pro- of 2021, had already caused additional internal vide sector-specific policy advice for the leadership displacement. Somalia has recorded an unprece- of the new government, drawing on the expertise of dented fourth consecutive failed rainy season. As of the WBG. It also provides them with an opportunity June, an estimated 7 million people were affected, 1. Commendable progress has been made in completing with 805,100 displaced. a substantive number of HIPC Completion Point triggers. There is a reasonable chance of famine in eight Examples that can be considered complete include the publication of audited financial accounts, ratification of areas by September if crop and livestock production the United Nations Convention against Corruption, pub- failure is widespread (3 million animals have died lication of debt bulletins, an agreement in the education sector concerning the roles and responsibilities of the since mid-2021), key commodity prices continue to FGS and the FMSs, agreement on a framework for a joint rise, and humanitarian assistance fails to reach the national health strategy, and the publication of the Soma- lia Annual Fact Book. Appendix 3 provides the full set of most vulnerable. The number of people facing se- triggers agreed to with the authorities toward the HIPC vere food shortages is projected to reach 7.1 million Completion Point. 2. The Integrated Food Security Phase Classification people by September, with 213,000 people facing (IPC) Acute Food Insecurity (IPC AFI) classification, ip- ‘Catastrophe’.2 It is worth noting that many of the cinfo.org, provides strategically relevant information to decision makers that focuses on short-term objectives to areas most affected by drought are also affected by prevent, mitigate or decrease severe food insecurity that conflict and violence. Addressing drivers of cyclical threatens lives or livelihoods. In particular, the IPC Acute Food Insecurity classification differentiates between differ- need, including climate change, requires sustainable ent levels of severity of acute food insecurity, classifying and sustained investments in water, livelihoods, and units of analysis in five distinct phases: (1) Minimal/None; (2) Stressed; (3) Crisis; (4) Emergency; and (5) Catas- basic social services across humanitarian, develop- trophe/Famine. Each of these phases has important and ment, and peace actors. distinct implications for where and how best to intervene. 8 Introduction to reinvigorate the reform agenda to deliver inclu- (A) Knowledge Work: sive growth for the Somali people. l Customs Revenue Sharing in Somalia The MPF portfolio finances 10 lending projects, l Humility on a Journey of State Building: Lessons with one project currently under preparation, and from FCV experience 19 analytical/advisory activities. The MPF provided l Local Governments and Federalism in Somalia financing worth US$382.44 million in the reporting l The Role of the State in the Education Sector in period. The portfolio is co-financed with US$1.19 bil- Somalia lion in IDA resources. With IDA complementing MPF l Public Service Performance and Quality in So- financing, the portfolio is now demonstrating the ad- maliland vantages of blending multiple sources of financing l Working Paper: Rapid Consumption Method and to leverage a coordinated and pooled financing ap- Poverty and Inequality Estimation in Somalia Re- proach using country systems. The total active Bank visited portfolio at the end of the reporting period amounted to US$1.76 billion combined IDA and Trust Fund fi- (B) Policy Dialogue: nancing. As of June 30, 2022, donors had commit- l Financial Governance Committee (FGC): Secre- ted a total of US$573.2 million to the MPF, of which tariat supported by MPF. Outputs include Finan- US$548.4 million had already been paid in. In the cial Governance Report 2021 (published in No- reporting period of January to June 2022, no addi- vember 2021) and 2022 (published in May 2022). tional contributions were received from the partners. l Intergovernmental fiscal relations: RVI dialogue Additional knowledge work, enhanced risk man- on WB Federalism paper with WB representa- agement, and policy dialogue was started for: tion. In addition, support to intergovernmental fis- 9 Introduction cal relations pursued through a senior intergov- effective policy interventions. ernmental fiscal advisor (a new contract issued The WBG commissions the MPF Monitoring for six months with clear deliverables in FY2022). Agent to provide periodic strategic risk reviews of l Establishment of Pension Technical Working emerging issues of institutional reform and state Groups (TWGs) in Somaliland and the Puntland building in Somalia. These reviews inform govern- State of Somalia. ment and WBG strategy, portfolio management, and l Country Economic Memorandum Launch: Dia- implementation. The WBG Somalia portfolio risks logue with Civil Society Organizations. are rated high, even when compared with those for l Brief: Somali Gender Landscape. portfolios in other fragile and conflict-affected set- l Brief: Macro Poverty Outlook for Somalia (April tings. There has been a new contract in place with 2022) and also this explanation of the data. the Monitoring Agent since September 14, 2021, The Bank produced Knowledge Products that and has been operational since October 15, 2021. document policy notes/technical briefs or research. New focus areas within the ambit of the Monitor- A Collection of Policy Notes for the New Somali ing Agent include the environmental and social Government aims to provide sector-specific policy framework, procurement, and project management, advice for the leadership of the new government, among others. drawing on the expertise of the WBG. The Bank’s The Bank established a Somalia Gender Equal- Poverty team has created a geospatial dashboard; a ity Platform, with the support of the MPF, to deepen blog on Mapping climate change and drought in So- and strengthen strategic engagement on women’s malia was also published to showcase how the spa- equal opportunities across operations and analytic tial data from this dashboard can be used to pinpoint initiatives. This platform will enable multiyear and high-risk disaster hotspots in Somalia. The Macro multisector nonlending Technical Assistance using a Poverty Outlook for Somalia (April 2022) demon- programmatic platform, which will assist the WBG’s strates that, despite key drivers of fragility, Soma- engagement in Somalia by promoting gender equal- lia is making gradual progress towards building its ity and inclusion. foundational institutions; this data is explained here. During the reporting period, the WBG has sought Other Knowledge Products deal with state build- to further strengthen its effectiveness when operat- ing and lessons from fragility, conflict, and violence ing in Somalia’s FCV-affected context. A retrospec- (FCV) experiences; the role of the state in primary tive analysis summarized some of the key lessons education; customs revenue sharing arrangements; learned that can be drawn from the WBG’s period of local governments and federalism in Somalia; and reengagement over the past decade, and that can public service performance and quality in Somalil- help inform the road ahead for the WBG’s engage- and. A Technical Note on ‘Rapid Consumption Meth- ment in Somalia. For example, this includes lessons od and Poverty and Inequality Estimation in Somalia related to the iterative approach taken to institution Revisited’ presents updated poverty and inequality strengthening and capacity building, the focus on estimates from the Somalia High Frequency Sur- delivering through country systems, the comple- vey. The Somalia Gender Landscape showcases mentarity between MPF and IDA financing, robust the gender landscape in Somalia on key indicators coordination structures and mission-driven partner- helpful for monitoring gender equality and designing ships, and the importance of increasing staff pres- 10 Introduction ence on-the-ground to deliver scaled-up support. ers through the WBG’s development mandate. In The WBG also began developing a new Risk partnership with the Rift Valley Institute, RRA con- and Resilience Assessment (RRA) for Somalia to sultation roundtables on key issues on the FCV deepen its understanding of FCV dynamics in the agenda will be organized. country. In line with the WBG’s FCV Strategy, the Progress has also continued on strengthening RRA is an internal analytical tool to strengthen the supervision and implementation support across the effectiveness and impact of the WBG’s development portfolio through the use of digital tools. In particular, support in fragile and conflict-affected settings. The as part of the broader focus on enhanced risk man- RRA will aim to inform the WBG’s new Somalia CPF, agement, the WBG is looking to systematize the country programming, and policy dialogue to more use of the Geo-Enabling Initiative for Monitoring and effectively address FCV risks and build on sources Supervision (GEMS) to support portfolio mapping, of resilience. Given the complexity and multifaceted project level supervision, monitoring and evaluation, nature of FCV dynamics in Somalia, consultations and capacity-building efforts. In addition, given the with a broad range of stakeholders are key to draw dynamic political economy and FCV context across on a diversity of perspectives, develop an informed the broader Horn of Africa region, the WBG has con- analysis of FCV drivers and sources of resilience, tinued its partnership with the International Crisis and help identify a series of recommendations on Group for internal monitoring briefings to help inform how to most effectively address structural FCV driv- its national- and regional-level programming. Figure 1. Illustrative Set of Key Lessons Learned from the WBG’s Engagement in Somalia Stay for the course and be prepared for a Use a regional hub to increase on-the- non-linear journey ground presence in highly insecure settings Invest in core government systems as Centralize security and logistics foundational investments arrangements in insecure environments Leverage technical-level dialogue to Build strong relationships and prepare for maintain momentum when faced with the demands of enhanced client support political deadlock Use iterative approaches to adapt to Pursue common approaches to core project dynamic contexts functions in low-capacity environments Smaller-scale financing can be Increase support for ESF implementation transformative Leverage existing coordination mechanisms as platforms for mission-driven partnerships 11 12 Portfolio Overview he Multi-Partner Fund (MPF) portfolio fi- for urban resilience. In addition, from this edition T nances 10 lending projects, with one project currently under preparation, and 19 analyti- cal/advisory activities. The MPF provided financing onwards, the activities have been reorganized into three categories to better understand the impact of the Bank’s work (a) Investments projects; (b) Pol- worth US$382.44 million in the reporting period. The icy Dialogue and Analytical activities; and (c) Risk portfolio is co-financed with US$1.19 billion in Inter- Management activities. Bank reports or publica- national Development Association (IDA) resources. tions prepared during the reporting period are given With IDA complementing MPF financing, the portfo- in the Knowledge Products subsection. The rest of lio is now demonstrating the advantages of blending this chapter provides an update of progress across multiple sources of financing to leverage a coordi- these portfolios. nated and pooled financing approach using country systems. The total active Bank portfolio at the end Effective, Accountable of the reporting period amounted to US$1.76 billion Government combined IDA and Trust Fund financing. As of June Strengthening Institutions 30, 2022, donors had committed a total of US$573.2 and Financing for million to the MPF, of which US$548.4 million had Human Capital Delivery already been paid in. In the reporting period of Janu- The Effective, Accountable Government portfolio ary to June 2022, no additional contributions were of the MPF financed nine projects. Of these, four received from the partners. are recipient-executed investment projects and five The MPF projects remain organized under three are analytical/advisory activities (Table 1). The MPF focus areas that target specific pillars of Somalia’s provides financing worth US$243.47 million. The National Development Plan: (a) Effective, Account- portfolio is co-financed with US$828 million in IDA able Government strengthens institutions and fi- resources. It represents the largest portfolio within nancing for human capital delivery; (b) Enabling the MPF; many of the projects are closely inter- Economic Growth supports economic resilience linked. The MPF continued to scale up the portfolio and opportunities, through which the World Bank in Human Development with US$25 million towards Group (WBG) aims to increase economic resilience Empowering Women through Education and Skills as a basis for long-run poverty reduction and in- Project and US$30 million (yet to be transferred) for clusive growth; and (c) Urban Infrastructure, which the Somalia Recurrent Cost and Reform Financing strengthens institutions to deliver services, specifi- Project (Phase III). The portfolio now also has two cally, building the capacity of Somali municipalities regional projects through the Horn of Africa Initia- 13 Portfolio Overview tive: the De-risking, Inclusion and Value Enhance- service delivery, scale-up of the ‘Marwo Caafimaad’ ment of Pastoral Economies in the Horn of Africa Female Health Worker Program and retraining for (DRIVE, US$70 million) and Groundwater for Resil- COVID-19 response. ience (US$30 million). Under the Country Partner- The RCRF complements the Capacity Injection ship Framework (CPF), the WBG is strengthening Project (CIP), which supports the Federal Govern- ongoing governance programs with a new focus on ment of Somalia (FGS) and Puntland State gov- fiscal space and improving access to—and the qual- ernment. The CIP develops capacity for key cross- ity of—key social services and resilience. This port- cutting government functions, thus strengthening folio aligns with CPF Focus Area 1: Strengthening policies and procedures for civil service manage- Institutions to Deliver Services. ment; strengthening policy management, coordi- nation, and monitoring capabilities at the center of Investment Projects government. The project is government-executed. The Recurrent Cost and Reform Financing It is complemented by a separate United Nations (RCRF) project has enhanced focus on intergovern- Development Programme (UNDP) project (Somalia mental fiscal federalism, citizen engagement, and Institutional Development Performance–SIP) using service delivery, and also introduced reform bench- common governance arrangements, harmonized marks for improved governance and service delivery results framework, and based on agreed division of at Federal Member State (FMS) level. Phase II of labor. This project is expected to close by the end of the project (RCRF II) was closed on June 30, 2022. December 2022. RCRF III, approved as an IDA-only grant of US$68 The Somaliland Civil Service Strengthening million and effective as of December 16, 2020, Project (CSSP) I and II addresses the unique pub- complements RCRF II with an enhanced focus on lic administration challenges of Somaliland, and intergovernmental fiscal federalism, citizen engage- strengthens basic functions for payroll, human re- ment, and service delivery. RCRF III was restruc- sources, and policy management in selected cen- tured and scaled up with additional financing (AF) in tral agencies and line ministries. Within the overall June 2022, providing a more predictable recurrent Series of Projects financing mechanism, the CSSP cost financing framework. It was only possible to complements the CIP (appraised at US$40 million) prepare the new operation because of the existing supporting the FGS and Puntland in the first phase, RCRF II project, to which the MPF provides critical and other member states in subsequent phases. support. RCRF II and RCRF III have been imple- The revised Civil Service Law has been passed by mented in parallel in an integrated manner. RCRF the Parliament. The Bank has advised the Govern- III has also contributed to COVID-19 response and ment of Somaliland to finalize and formally adopt recovery through scaled-up fiscal support to FMSs the administrative regulations to ensure they are through fiscal transfers for education and health understood by all public officials in Somaliland as legally binding on their behavior. The draft Pensions 3. More specifically, it targets the first objectives of Focus Law is undergoing review by the Solicitor General. Area 1: (1.1) Improve public finance management and in- The procurement of technical assistance to prepare stitutional effectiveness; (1.2) Enhance domestic revenue mobilization and resource sharing; and (1.3) Establish functional and technical requirements for a pension basic delivery systems for more inclusive social services. management information system is also under way. 14 Portfolio Overview The Somali Integrated Statistics and Eco- Additional financing for the restructured Domes- nomic Planning Capacity Building project is also tic Revenue Mobilization and Public Financial aimed at strengthening, and building the capacity Management (DRM/PFM) Capacity Strengthen- of, the National Statistical System and key official ing project is expected to lead to strengthened ca- statistics-producing agencies in the collection, pro- pacity to formulate efficient tax policy, establishment cessing, and dissemination of poverty and selected of more efficient inland revenue tax administration macroeconomic data, which will help inform devel- organization and systems, and strengthened PFM opment policy and poverty reduction activities. This and auditing systems. The closing date of the origi- component provides support to the client’s key of- nal project was extended by two years—from June ficial statistics-producing agencies in strengthen- 30, 2020, to June 30, 2022—to allow for the success- ing the capacity of the country’s National Statistical ful implementation of the project’s original and new System (NSS) to collect data for poverty and mac- activities. The changes will strengthen the overall roeconomic monitoring (national accounts/gross do- development impact of the original project and bet- mestic product/sector growth, inflation, key admin- ter align the Bank assistance with the changing gov- istrative data). It will support the training of staff to ernment priorities and country context. Implementa- compile poverty indicators and indexes as well as to tion progress has been very positive, as most of the draw poverty lines, using new data from the poverty agreed activities under the PFM components have survey and new Consumer Price Index (CPI). This been completed and as such will close as planned activity will also support the expansion of skills and on June 30, 2022. However, due to the delay in the expertise of professional staff. implementation of the integrated tax administration 15 Portfolio Overview automation system (ITAS) system, the government as one of the triggers for the completion point of the requested for a one-year extension to enable them HIPC Initiative. The USR also provides a platform to complete its implementation, to which the Bank for engaging UN, humanitarian, and donor agencies agreed and extended the DRM component by one to collaborate on registering poor and vulnerable year to June 30, 2023. HHs to enhance its functionality. The Somalia Shock Responsive Safety Net The first World Bank–financed IDA health project programmatic update consolidates the IDA-funded investment in Somalia’s health sector in 30 years— Somalia Shock Responsive Safety Net for Hu- the US$100 million Improving Healthcare Servic- man Capital Project (SNHCP) and Somalia Shock es in Somalia project (‘Damal Caafimaad’)—will Responsive Safety Net for Locust Response improve and expand the coverage of essential and Project (SNLRP). (Details about the MPF-funded high-impact health and nutrition services in project Advisory Services and Analytics (ASA) component, areas. It will also strengthen stewardship and over- ‘Somalia Social Protection Support: Building Blocks sight capacity of the federal and state ministries of towards a National Social Protection System’, are health, with a focus on public financial management, given on page 18.) The SNHCP has supported the organizational development, and regulatory and pri- FGS to operationalize the national Social Protec- vate sector development. The Damal Caafimaad tion Policy and develop a government-led national project is expected to reach about 1.84 million ben- shock responsive social protection system in Soma- eficiaries in some of Somalia’s most disadvantaged lia, known as ‘Baxnaano’, with a focus on enhancing areas. The project incorporates lessons from the cash transfer linkages with the health and educa- health program experience in the RCRF (Phases II tion sectors for enhanced human development out- and III) project and the Health ASA. An additional comes. Through IDA US$318 million (funded initially US$7 million in project funds have been retained to through IDA US$65 million and augmented with two contribute to achievement of the project’s develop- AFs of US$100 million and US$143 million), the ment objective in Somaliland—an agreement has SNHCP provides predictable and reliable cash as- been reached between the FGS and Somaliland, sistance to poor and vulnerable households (HHs) and the health team will be launching a mission in across Somalia. It has also scaled up emergency Somaliland in October 2022 to appraise the Somalil- cash transfer top-ups in recent months to impacted and subcomponent. HHs in response to the ongoing severe drought. The The Somalia: Empowering Women through SNLRP, financed through IDA US$40 million and an Education and Skills Project (Rajo Kaaba) is AF of IDA US$75 million, operationalizes the shock a new project; it has been approved but not yet responsive aspect of the Baxnaano to provide six signed. It aims to Improve literacy, numeracy, and months of emergency cash assistance to locust- income-generating skills in targeted populations of affected households, as well as collect HH registra- women and to prepare selected women for leader- tion data for inclusion in the Unified Social Registry ship roles. Beneficiaries will include young women (USR). and disadvantaged young men from primarily mar- The FGS has identified the development of a USR ginalized and vulnerable populations, including In- as a priority and a key instrument for advancing its ternally Displaced Persons (IDPs), in a set of target preparedness for responding to shocks, and serves districts across Somalia, including Somaliland. It is 16 Portfolio Overview expected that at least 10 percent of beneficiaries will Policy Dialogue and Analytics be persons with disabilities. In addition to direct ben- The Somalia Financial System Initiative (FSI), eficiaries, the project is expected to bring substantial to be implemented across Somalia, will support the benefits for family members of beneficiaries through national financial sector development agenda ben- increased family income, increased knowledge to efiting all of Somalia. Following the project concept support child development and the multigeneration- note review in February 2022, implementation is un- al returns to investments in female education (im- der way with the project coordinator for the FSI Sec- proved child health, nutrition, and education). The retariat onboarded. The World Bank (WB) task team project has received strong endorsement and com- is closely coordinating the implementation with ac- mitment from the federal and state ministries of edu- tivities under other projects (for example, SCALED- cation and other participating and/or implementing UP) as appropriate as well as continuing bi-weekly entities, including Somaliland. An inclusive federal meetings with donor representatives to leverage and state technical task force has been established. their support and networks. The aim of the FSI is to Efforts will be coordinated with the rest of the WBG unlock international investment and correspondent portfolio in Somalia and key project implementation banking relationships in Somalia by improving the unit staff will be shared with the Somalia Educa- integrity of the financial sector and ensuring that tion for Human Capital Development Project, which high standards of corporate governance, risk man- should allow for more efficient implementation from agement, and compliance safeguarding against ter- the start. rorist financing and illicit financial flows are met by 17 Portfolio Overview participants (in both the public and private sectors). the Social Registry Architecture; Welfare Ranking The Somalia Shock Responsive Safety Net Model for the USR; and the development of a Dis- program includes (besides the two investments proj- cussion Paper on the experience of Baxnaano as a ects discussed on page 16) an ASA component as national safety net program operating in the context well—the MPF-funded Somalia Social Protection of fragility and prolonged humanitarian aid. It is also Support: Building Blocks towards a National So- supporting the design of a Productive Safety Net in- cial Protection System. The ASA provides techni- tervention. cal assistance support to achieve some of the key The Financial Governance Committee (FGC) objectives of the SNHCP around institutional capac- has provided technical advice and facilitated policy ity building. Specifically, ASA activities contributed to dialogue on a variety of financial governance is- the establishment of social protection policy and gov- sues and has made tangible progress over the past ernance structures; design of the Baxnaano and its six months on a number of issues, including use delivery systems, as well as the development of the of country systems, the CBS’s progress in licens- USR as a broad platform to support shock response ing and regulating mobile money service providers, and coordination across social programs. The ASA and rollout of the National Payment and Settlement (with co-funding from the Foreign Commonwealth System. The FGC met in March and June. Though and Development Office) also supported a Targeting additional FGC meetings were planned, they were Evaluation of the current community-based target- postponed due to the political situation. The dele- ing approach by the SNHCP; a Technical Paper on gates, however, maintained regular engagement— 18 Portfolio Overview they provided advice virtually as well as made a physical trip to Mogadishu in February and May to meet counterparts in person. The annual Financial Governance Report (FGR) was published. The re- port assesses the progress made by the FGS in strengthening financial governance over the period July 2021 to May 2022. It also identifies financial governance risks during the political transition and priorities for the incoming administration. The FGC is also engaged with the Director General of Immi- gration and Naturalization on the passport tender process. It has also been providing guidance and support on the preparation of a contract handover for the Visa contract, and on the next steps for refin- ing the scope of the Pre-Export Verification of Con- formity (PVoC) tender so that it is ready for issuance when the next administration is in place. To improve recommendations regarding fiscal federalism in So- communications with the broader FGS, the FGC malia took place between January and June 2022. has also translated key advisory notes and presen- Key issues at hand concerning fiscal federalism and tations into Somali, including the executive summa- underlying complexities were discussed, including ry and main body of the FGR 2022. The FGC twitter a diagnostic analysis of key remedies and recom- account counted over 18,900 impressions, 10,350 mendations. Support on pension reforms in Somalia visits, 171 mentions, and 98 new followers this re- has also been ongoing. Between January and June porting period. The account is used to promote the 2022, the team has undertaken four pension reform annual report, share meeting summaries, and high- support missions, which were part of broader imple- light meetings outcomes. mentation support missions but with separate agen- The Enhancing Governance Dialogue on So- das and schedules. malia platform seeks to improve policy dialogue and coordination necessary for reform progress, Risk Management achievement of governance projects’ objectives, The Somalia: Capacity-Building for Environ- and governance integration in sectoral operations. mental, Social, and Security Risk Management Thought-leadership and discussions on governance in Development Interventions project aims to issues were facilitated by various papers, ranging strengthen country capacity to manage environ- from the role of the state in the education sector, mental, social, and security risks in development lessons from the fragility, conflict, and violence interventions in Somalia. This project has started (FCV) experience, and customs revenue sharing with the review and approval of the concept note for in Somalia, to a diagnostic paper on public invest- this project in early January 2022. Some early prog- ment management. A five-week series of roundtable ress has been achieved—the project has started discussions unpacking the main challenges and procuring some of the underlying analytical work on 19 Portfolio Overview Environmental and Social Standards (ESS), for ex- lia, was also published to showcase how the spatial ample, on ESS7; the project has also worked with data from this dashboard can be used to pinpoint teams on existing approaches and work streams for high-risk disaster hotspots in Somalia, where the ESS2, ESS5, and ESS10. A draft institutional over- adverse impact of natural disasters would be felt view has been developed. Hiring of consultants to more than in other areas. support the government in Mogadishu has taken place. On security, an initial overview on status and State Building and Lessons challenges has been prepared. from FCV Experiences Building transparent, accountable, inclusive, effi- Knowledge Products cient, and effective public sector systems is a chal- lenging and long-term endeavor in FCV affected Creation of a Geospatial countries. Titled ‘Humility on a Journey of State- Dashboard and Blog Building: Lessons from FCV Experience’, this paper The World Bank’s Poverty team has created the strives to explain that a social contract approach can geospatial dashboard, a database of numerous sub- much better explain why, despite improvements in national socioeconomic and climate risk indicators service delivery, state legitimacy may not necessar- drawn from multiple publicly available sources. A ily improve. It also explains the disconnect between blog, Mapping climate change and drought in Soma- lessons from research literature and the rigidity of 20 Portfolio Overview approaches from practitioners operating in FCV countries. This paper advocates that effective donor engagement in FCV countries requires humility and more realism about what international actors can achieve and gives some possible ideas to do things differently. The Role of the State in Primary Education This paper, titled ‘The Role of the State in Pri- mary Education in Somalia,’ highlights the need for Somalia to reflect on numerous policy measures to increase the provision of schooling. It shows the lim- its of a full-fledged public model of financing primary education in Somalia, and concludes with a case for the government to increase the share of revenues allocated to education. The paper also reviews the experiences of comparator countries in South Asia and Sub-Saharan Africa that face the same chal- lenges and recommends policies to facilitate a larg- er role for the private and non-state sector, including mechanisms that help to ensure access to non-state opment partners could provide both technical sup- education for children from disadvantaged commu- port and performance-based funds to ensure that nities, as well as incentivizing and/or requiring non- any agreement is credible and sustainable. state schools to deliver good quality education. Local Governments and Customs Revenue-Sharing Arrangements Federalism in Somalia Trade-related taxes comprise the largest share Taking stock of the legal provisions for federalism of domestic revenues in Somalia. However, not all in Somalia, the paper titled ‘Local Governments and administrations benefit from the collection of cus- Federalism in Somalia: Fitting the Pieces Together?’ toms revenues, thus creating a large fiscal disparity assesses relations between FMSs’ administrations between various levels of government. This paper, and existing local governments. It also looks at the titled ‘Customs Revenue Sharing in Somalia’, pro- role of existing local governments in service deliv- vides some possible options for customs revenue- ery, and the political and fiscal implications of the es- sharing arrangements through fiscal equalization tablishment of local governments countrywide. The between the FGS and the FMSs, which will help to paper recommends actions to clarify and strengthen strengthen the federal system and allow for more FMS relations with existing local governments. It equitable access to domestic revenues. Also pro- also provides an input to discussions on expanding posed are possible options for a revenue-sharing local government structures and the role of the state agreement concerning trade-related taxes. Devel- in service delivery at local government level. 21 Portfolio Overview Public Service Performance Macro Poverty Outlook for Somalia and Quality in Somaliland A Brief on the Macro Poverty Outlook for Soma- The Government of Somaliland, together with lia (April 2022) demonstrates that while Somalia is the World Bank, is implementing the Civil Service making gradual progress towards building its foun- Strengthening Project to strengthen basic functions dational institutions, key drivers of fragility prevail. for payroll, human resources, and policy manage- The economy is showing modest signs of recovery. ment in selected central agencies and line minis- Increased private sector activity in urban areas, tries. To inform this project, research was under- higher remittance inflows, and a rebound of exports taken to assess, identify, analyze, and understand are driving the recovery. However, recurrent climatic the leadership impact of service delivery and to shocks and political uncertainty are affecting the better understand how best to improve the quality economy and well-being of the population, contrib- of services provided by the ministry departments. uting to forced displacement and widespread pov- Presented in the ‘Government Service Delivery and erty. This data is explained here. Leadership Survey Report’, this research aims to improve leadership and service delivery, including Revisiting Poverty and Inequality through the subsequent monitoring of indicators de- Estimation in Somalia veloped at baseline in future evaluations. A Technical Note on ‘Rapid Consumption Method and Poverty and Inequality Estimation in Somalia Revisited’ presents updated poverty and inequality estimates from the Somalia High Frequency Survey. This survey used the Rapid Consumption Method to collect consumption data quickly in an environment of high insecurity. Previous poverty estimates did not properly impute consumption, resulting in the impu- tation of negative total consumption values for some households. This paper uses the Two-Part Multiple Imputation method to address this issue. This Note adopts the newly updated 2011 purchasing power parities to convert the High Frequency Survey con- sumption data for global poverty measurement pur- poses, and provides new inequality measures to ad- dress issues with the previous exercise. The paper finds that new poverty rates are slightly lower than those using the previous method while inequality is higher with the new method. 22 Portfolio Overview Table 1. Overview of Projects: Effective, Accountable Government As of June 30, 2022 (in US$ million) Projects Total MPF IDA Project Cost Grant Disbursed Grant Disbursed Investment projects 1. Public Sector Capacity Injection Project (CIP) 40.00 36.42 29.92 2. Somaliland Civil Service Strengthening Project 14.85 14.85 8.95 (CSSP)4 3. Domestic Revenue Mobilization and PFM 50.00 30.00 28.08 20.00 14.94 Capacity Strengthening Project (DRM/PFM) 4. Recurrent Cost and Reform Financing (RCRF) 338.00 123.00 107.11 190.00 90.10 Program 5. Somali Integrated Statistics and Economic 20.00 20.00 5.29 Planning Capacity Building Project 6. Improving Healthcare Services in Somalia 100.00 100.005 0.40 Project (‘Damal Caafimaad’) 7. Social Protection Engagement6 318.00 318.00 87.65 115.00 115.00 55.09 8. Somalia: Empowering Women through 52.00 25.00 25.00 0.14 Education and Skills Project (‘Rajo Kaaba’)7 9. Education in Somalia 40.00 40.00 0.50 Policy Dialogue and Analytics 10 Somalia Financial System Initiative 6.50 1.00 0.11 11. Support to Financial Governance Policy 5.60 5.60 4.76 Dialogue (FGC) 12. Trade 0.60 0.50 0.42 13. Enhancing Governance Dialogue on Somalia 1.90 1.90 1.76 14. Health in Somalia 1.90 1.90 1.76 15. Social Protection Engagement: Somalia Social 2.00 2.00 1.70 Protection Support (ASA) 16. Supporting Financial Inclusion and Private 0.40 0.40 0.01 Sector-Led Recovery in Somalia (PASA) Risk Management 17. Somalia: Capacity-Building for Environmental, 0.50 0.50 0.13 Social, and Security Risk Management in Development Interventions 18. Somalia Financial Management Capacity 3.60 0.40 0.02 Building and Risk Management TOTAL 1,110.85 243.47 184.73 828.00 254.11 4. This row has the financials for CSSP I and II. 5. US$25 million of this amount is from the Global Financing Facility. 6. The financials for Social Protection Engagement have been split into two rows. The first row is for the Safety Net for Human Capital Project. The second row is for the Safety Net for Locust Response Project. 7. This includes Early Learning Partnership MDTF resources of US$2 million. 23 24 Portfolio Overview Enabling Economic Growth tual adoption of international quality assurance Supporting Inclusive standards. The overall project disbursement is 75 Private Sector-Led Growth percent. The undisbursed amount is mainly ear- The Enabling Economic Growth portfolio fi- marked for the final payment of results-based funds nanced six active projects. Four of these are re- to solar service providers upon verifications of sales cipient-executed investment projects, and two are of quality certified off-grid solar products; and fees Bank-executed analytical/advisory activities (Table for consultancy services for the options analysis for 2). The MPF provides financing worth US$44 mil- subtransmission and distribution investments that lion to this focus area. The portfolio is co-financed is under procurement (contract signing and com- with US$297.5 million in IDA resources. This port- mencement by October 2022).The project has been folio aligns with the CPF under Focus Area 2: Re- extended for 12 months, with June 30, 2023, as the storing Economic Resilience and Opportunities, new closing date. This will allow full disbursements through which the WBG aims to increase economic of the results-based grants. resilience as a basis for long-run poverty reduction The Somalia Crisis Recovery Project (SCRP) and inclusive growth.8 Under the CPF, the WBG’s has secured AF of US$50 million under the Bank’s aim is to support activities that increase access to newly established IDA Crisis Response Window to finance and energy, such as new lending for small respond to an emerging food security crisis. The and medium-sized enterprises, particularly for wom- number of direct overall beneficiaries from the proj- en and youth; expanded access to electricity from ect as a result of this AF would be close to 2 million renewable sources in targeted rural and peri-urban people, with a few more million indirect beneficiaries. communities; and greater licensing and supervision The project’s current disbursements are at US$51.2 capacity of the Central Bank, resulting in more se- million, representing 27.44 percent of the total proj- cure financial services. ect allocation amount (as of June 2022). Despite initial delays, implementation is accelerating with Investment Projects visible progress in the control of desert locusts; the The Somali Electricity Access Project (SEAP) rehabilitation of flood risk management infrastruc- has strengthened the capacity of the client in terms ture such as river embankments; contributions to of project coordination, procurement and financial Somalia’s COVID response including locally made management, and proactiveness on technical is- masks, oxygen masks and other inputs; and provi- sues. The Bank team continues to provide support sion of health and veterinary services to communi- to manage associated risks. Good success has ties affected by multiple crises including floods, lo- been registered in Somaliland regarding the even- custs, COVID, and the drought. In addition, through the project, the FGS has agreed to proposals with a number of Implementing Partners to respond to 8. More specifically, this portfolio targets the first three ob- jectives of Focus Area 2: (2.1) Improve the business envi- the drought situation. Other project activities are at ronment and lower barriers to entry; (2.2) Increase access different stages of contracting, proposal review or to finance for inclusion and digital development; and (2.3): Increase access to renewable energy. A project on water development. and resilience is being financed through a PAC Grant un- Despite the challenging environment, the Water der IDA targeting the fourth objective: (2.4) Increase ac- cess to water for rural resilience and productivity. for Agro-Pastoral Productivity and Resilience, or 25 Portfolio Overview ‘Biyoole’, project has been able to set the founda- exposure visits and training on medical laboratory tion for the provision of water to agro-pastoral com- for animal laboratory on animal disease diagnosis munities in Somalia. In the reporting period, new were also conducted. water points were completed, constructed and/or The Somalia Capacity Advancement, Liveli- rehabilitated. The community engagement reports hoods and Entrepreneurship, through Digital show that the number of people that will have access Uplift Program (SCALED-UP) will help increase to improved water by project closure is 322,515 (of access to basic digital financial and government ser- which 48 percent are female). This figure exceeds vices targeting entrepreneurship and employment, the Project Development Objective (PDO) target particularly for women. In this regard, FGS partners, of 250,000 beneficiaries. The development of Na- with WB support, reached significant milestones tional Operations and Management Guidelines for such as the launching of the Somalia online Busi- water point maintenance is under way. When the ness Licensing and Registration System (BLRS), first signs of the drought started emerging in late publishing the first National Risk Assessment (NRA) 2021, the project decided to fast track rehabilitation on money laundering/financing of terrorism, and of boreholes to support drought efforts. Implementa- strong reform momentum in the Central Bank of So- tion has commenced in Somaliland as well—Biyoole malia. Financing under the Gargaara Micro, Small, is the first IDA project in Somaliland. The project also and Medium Enterprise (MSME) Financing Facility supported a number of training opportunities, and reached US$4.1 million by the end of June 2022. exposure and experience sharing visits. The project However, there is more progress to make towards has delivered veterinary clinics which give extensive achieving the PDO—specifically with implementing services to the pastoral community; related to this, the Digital ID system. About 16 percent of the proj- 26 Portfolio Overview ect funds (US$16 million) have been disbursed at Policy Dialogue and Analytics the time of this report. The Crisis Recovery Platform will strengthen The Somalia Urban Resilience Program is im- core priorities on resilience and crisis recovery. This plemented as part of three interrelated projects—So- project aims to support the establishment of a new mali Urban Investment Planning Project (SUIPP, national coordination agenda across the Somalia P150374), Somalia Urban Resilience Project government for recovery and resilience activities in Phase I (SURP, P163857), and the Somalia Urban response to climate-driven disasters. It will make Resilience Project Phase II (SURP II, P170922). 9 recommendations on more effective ways the gov- It delivers prioritized basic urban infrastructure and ernment can organize itself to better respond to reinforces the municipal governments’ urban gover- compounding crises and to include more coherent nance capacities using the country’s public financial and aligned communication on response require- management (PFM) systems. The program sup- ments with development partners through the (new) ports participatory decision-making processes to Aid Coordination Architecture. In addition, it aims to identify key urban investments that advance urban strengthen the institutional, systems, and policy-re- resilience in six strategically important cities across lated aspects of government-led preparedness and five FMSs and the Benadir Regional Administration early warning in Somalia, enabling more informed, (BRA). These include the cities of Mogadishu (BRA), coordinated, and transparent decisions on disaster Garowe (Puntland), Baidoa (South West State), Kis- risk management. mayo (Jubbaland), Dhusamareb (Galmudug), and Beledweyene (Hirshabelle). The program also helps strengthen the institutional arrangements, including key urban management capacities, that underpin municipal functionality and its relationships within the Somali Government and with external actors. A Federal Project Coordination Unit, domiciled in the Ministry of Public Works and Reconstruction, has been mobilized and provides substantive backstop- ping and quality assurance support to municipal Project Implementation Units with timely implemen- tation, in addition to performing a coordinating role. The government is engaging an international firm, the UN Office for Project Services (UNOPS), for en- gineering design and supervision to ensure quality and timely implementation in compliance with the World Bank’s Environmental and Social Framework (ESF). 9. The SUIPP and SURP Phase I have been completed and ICRs finalized. 27 Portfolio Overview as of August 2021). Platform activities will include support for development of gender inputs for the So- malia Climate Change Program, potential additional analysis for the social norms and behavior-change impact evaluation in partnership with the Gender In- novation Lab, and potential support for addressing the gender dimensions of the current drought crisis. To celebrate International Women’s Month, the Plat- form launched a ‘Blogathon’ campaign, with a mix of seven internal and external blogs between March to May 2022. (More information on the Somalia Wom- en’s Empowerment Platform and the blogs is given on page 52.) Knowledge Products Collection of Policy Notes for the New Somali Government This collection of Policy Notes aims to help un- lock Somalia’s potential to stabilize, grow and pros- Established in June 2021, the Somalia Women’s per by addressing an urgent need to create jobs and Empowerment Platform is a multiyear and multi- stimulate growth. Prepared by a multi-disciplinary sectoral initiative that aims to assist the WBG’s en- World Bank Group team, the Policy Notes are or- gagement in Somalia by providing strategic support ganized in line with the Jobs and Economic Trans- on gender issues to help define key operational, formation (JET) framework. The first pillar of the technical, and analytical priorities for engagement JET framework considers how job-creating private under the Country Partnership Framework. It aims investments can be fostered and includes issues to deepen and strengthen strategic engagement on such as macroeconomic stability, fiscal federalism, women’s equal opportunities across operations and trade, infrastructure, finance and digital technolo- analytic initiatives. For instance, a formal architec- gies, and the business environment. The second ture (to strengthen systematic and strategic sup- pillar of the JET framework focuses on how workers port to Task Teams to identify and narrow gender can improve their productivity through strengthening gaps to inform project design) has improved con- human capital (health and education), gender and nections between Task Teams and other relevant inclusion, as well as building resilience. Given So- gender teams, including the Gender Group, Global malia’s potential to develop new sectors to support Practice Gender Focal Points, the Africa Gender In- growth and job creation, a section has been devoted novation Lab, and others. The Platform team also to future growth drivers, which considers urbaniza- conducted a gender portfolio review of 21 projects tion and leveraging natural resources such as agri- from the Somalia portfolio (selecting projects active culture, fisheries, and petroleum. 28 Portfolio Overview Table 2. Overview of Projects: Enabling Economic Growth As of June 30, 2022 (in US$ million) Projects Total MPF IDA Project Cost Grant Disbursed Grant Disbursed Investment projects 1. Somali Electricity Access Project (SEAP) 7.20 7.20 5.41 2. Somalia Capacity Advancement, Livelihoods 101.00 33.00 6.80 68.00 9.21 and Entrepreneurship through Digital Uplift Program (SCALED-UP) 3. Crisis Recovery and Resilience: Somalia Crisis 187.50 187.50 51.20 Recovery Project (SCRP) 4. Water for Agro-Pastoral Productivity and 42.00 42.00 17.88 Resilience (or ‘Biyoole’) Policy Dialogue and Analytics 5. Crisis Recovery and Resilience: Crisis 2.00 2.00 1.35 Recovery Platform 6. Women Empowerment Platform 1.80 1.80 0.46 TOTAL 341.50 44.00 14.02 297.50 78.29 29 Portfolio Overview Urban Infrastructure Project (SUIPP) and SURP I which have both been Strengthening Resilience recently completed. SURP II is expanding munici- The Urban Infrastructure portfolio financed three pal government–implemented urban infrastructure active projects. Two of these are recipient-executed investments and helping to deepen fiscal decentral- investment projects, and one is a Bank-executed ization across the country, with activities in Moga- analytical/advisory activity (Table 3). The MPF pro- dishu and each FMS. The six-year SURP II was vides financing worth US$94.97 million. The portfo- declared effective in February 2020. Fully staffed lio is co-financed with US$70 million in IDA resourc- municipal PIUs were established in each partici- es. This portfolio aligns with the CPF under Focus pating city. Civil works under SURP II are currently Area 1: Strengthening Institutions to Deliver Servic- ongoing in Baidoa, Garowe, and Kismayo, having es, specifically, Objective 1.4: Build the capacity of commenced in August 2021, September 2021, and Somali municipalities for urban resilience. March 2022, respectively. More recently, the two new cities of Dhusamareb (Galmudug) and Beledw- Investment Projects eyene (Hirshabelle) have joined the project and are The MPF and IDA co-financed US$153.5-million10 focused on preparatory activities. Somali Urban Resilience Project (SURP) Phase II builds on the Somali Urban Investment Planning Policy Dialogue and Analytics The Urbanization Platform is a policy dialogue 10. SURP I had a US$9.87 million grant, which has been forum which finances the ongoing Somalia Cities disbursed. SURP II was granted US$41.5 million in Ad- ditional Financing (P178887) in June 2022, reallocating Initiative. The discussions/coordination are ongoing; US$20 million (IDA) of project funds to the CERC to re- two city profiles (Beledweyne and Bosaso) have spond to the drought crisis, and US$21.5 million (TF) in new resources, with a new project total of US$153.5 mil- been prepared; two city-level coordination platforms lion. The AF was declared effective in July 2022. for Mogadishu and Baidoa have been formed. Table 3. Overview of Projects: Urban Infrastructure As of June 30, 2022 (in US$ million) Projects Total MPF IDA Project Cost Grant Disbursed Grant Disbursed Investment projects 1. Somalia Urban Resilience and 162.47 92.47 20.95 70.00 5.55 Recovery Project (SURP) Policy Dialogue and Analytics 2. Urbanization Platform 2.00 2.00 0.60 3. Strengthening Social Cohesion, Inclusion and 0.50 0.50 Resilience through Community Institutions TOTAL 164.97 94.97 21.55 70.00 5.55 30 Somalia Gender Landscape Gender equality fosters productivity gains, minimizes losses in wealth, reduces poverty, boosts shared prosperity, and supports green, resilient, and inclusive development. Gender gaps, gender-based violence, and disadvanta- geous social norms facing women and girls persist despite some progress, and gains in human capital of women and girls remain untapped. Turning human capital investments into economic gains means addressing multiple barriers to women‘s economic empowerment, including improving their voice and agency. The Somalia Gender Landscape showcases the gender landscape in Somalia on key indica- tors helpful for monitoring gender equality and designing effective policy interventions. 31 32 Spotlight Somalia Urbanization Review: Fostering Cities as Anchors of Development The Somalia Urbanization Review11 is the first comprehensive analysis that serves as a basis for a coherent urban development strategy for Somalia. It captures the challenges pertaining to urbanization in Somalia and identifies key interventions that can help better manage them. The Urbanization Review draws on both technical and political economy analyses to provide a better understanding of a broad range of urban issues in Somalia. The report aims to facilitate a more informed dialogue between the government, private sector, civil society, development partners, and other stakeholders on a more comprehensive urban development strategy in Somalia. F or 30 years, Somalia’s cities have served as dwellers’ livelihoods and quality of life, eventually anchors of development. If managed well, helping lift many out of poverty. urbanization holds the key to helping Soma- On the other hand, if poorly managed—if Soma- lia to develop faster and further. Though Somalia’s lia fails to meet the needs of growing urban popu- high urban growth rate can present challenges, fast lations—the country’s modest successes and wider growing cities can be powerful catalysts for econom- stability will be undermined. The faster Somali cit- ic growth, innovation, and improved service delivery. ies grow, the more the absence of adequate plan- Evidence shows that incomes rise as the share of ning and uneven, contested governance stifle the population living in urban areas increases: On aver- potential development and economic growth those age, for every 1 percent increase in urbanization, cities could generate. Unplanned growth causes gross domestic product (GDP) per capita grows 4 slum expansion and environmental degradation. It percent. Cities generate more than 80 percent of also increases competition over land and the costs GDP worldwide. Their density promotes productiv- of providing basic public goods such as roads, water ity and offers people opportunities to improve urban and sewer systems, and access to the power grid. In Somali cities, settlement patterns are typically highly 11. The report was published in 2021 by the World Bank. segregated by ethnic groups/clans. But given that An overview and the full report (Project code: P167763) cities are receiving large waves of forcibly displaced are available at: https://openknowledge.worldbank.org/ handle/10986/35059. people and other rural-urban migrants, particularly 33 Spotlight with the ongoing drought, those inter- and intra- tive complexities in Somalia mean that conventional clan dynamics are at risk of being destabilized. The approaches to addressing urbanization are unlikely rights of urban internally displaced persons (IDPs) to work. Urban management is stymied by a potent are contested and their settlements are often cut off combination of inadequate demographic data na- from basic services. Poor and marginalized groups, tionally; lack of clarity on city boundaries; disputed, more broadly, are often excluded from access to unclear, and overlapping jurisdictions over cities be- land and basic services. And property disputes in tween federal, state, and district authorities; the lack neighborhoods where real estate is a prized and of a strong formal-legal role and adequate capacity scarce commodity are a major source of violence and resources for mayors and municipalities, partic- and communal tension. As promising as Somalia’s ularly in south central Somalia; a pluralistic, disput- cities economic successes have been, the ongoing ed, and conflict-ridden set of systems for property risks of targeted political violence, communal clash- titling, sales, and dispute management; and the ex- es, and terrorist attacks keep them vulnerable. The istence of numerous non-state actors making claims Somali cities of Mogadishu, Merka, and Kismayo on political authority or service provision. were recently ranked the three most fragile cities in Somalia’s urban centers are governed by a com- the world. plex mix of different state and non-state authorities, Given the central role cities play in Somalia’s a political landscape described as “hybrid gover- development and stability, managing Somalia’s ur- nance”. Despite the presence of multiple state ac- banization is crucial. Yet the political and administra- tors—the federal government, federal member state governments, and district administrations—much to most de facto authority resides in the hands of tra- ditional clan elders, business leaders, militia lead- ers, civic groups, and religious authorities. These non-state actors were frequently already an impor- tant source of political authority in the years before the civil war, but their roles greatly expanded and were tested during the long period of war and state collapse in Somalia, when they constituted the only source of governance in the country. Their relations with one another range widely, from routinized coop- eration and power sharing to open rivalries. When this authority is expressed in quasi-judicial roles in- volving rulings on crimes or disputes, it reflects a form of legal pluralism in which residents may opt for civil, customary or religious law, or a combination of more than one. These hybrid governance arrange- ments are fluid and variable in their degree of local legitimacy and capacity. With the partial exception of al-Shabaab, which can impose its decisions by 34 Spotlight force, most of Somalia’s panoply of informal gover- accountability mechanisms that undergird third par- nance actors rely heavily on negotiation. ty government service delivery models. Put simply, Somalia is not yet at a point where The goal of managing urbanization in Somalia conventional urban development policies and pro- should be to incrementally bring a wide range of grams can be effective. The country needs to maxi- formal and informal rules and systems surround- mize the positive contributions its cities can make to ing governance and service delivery into a state of overall development, employment, peace, and good greater coherence, complementarity, credibility, and governance, but currently lacks the effective, em- capacity. “Coherence” means that conflicting sys- powered, and financed local institutions to provide tems and institutions evolve from competing against the requisite governance framework and directly one another to cooperating, so they broadly move provide services. Somalia’s cities do have commit- in the same direction, with similar standards, rather ted leadership—both large and small cities have at- than undermining one another. Because no single tracted some dedicated and effective leaders over entity can address the vast urban governance and the past 25 years.12 But those leaders have had few service delivery challenges, “complementarity” re- tools to work with and have faced resistance from quires formal and informal systems to find a way to many quarters. not merely co-exist but also help fill in each other’s A transitional strategy for engaging and strength- gaps, leveraging respective comparative advan- ening urban governance and service delivery is re- tages. “Credibility” emphasizes that the process and quired and unavoidable. Ongoing efforts to strength- the outcomes of such an endeavor need to be per- en local government and defining political authority ceived as legitimate by all to ensure political sup- in Somalia must be twinned with pragmatic strate- port. It is particularly important to ensure the state’s gies aimed at working within existing local capaci- acceptance and buy-in whenever partnering with ties to deliver badly needed governance and ser- “hybrid” governance actors for service delivery. Fi- vices to urban populations.13 Such an approach is nally, “capacity” will need to be strengthened among less likely to result in “premature load bearing”, 14 both formal and informal actors to enable them to whereby Somali government institutions are made play more complex and expansive roles. to shoulder too much, too soon. Working with what 12. See, for instance: Harding, Andrew. 2016. The May- exists may require a mindset change: cooperating or of Mogadishu: A Story of Chaos and Redemption in partners (especially development partners) need to the Ruins of Somalia. New York: St. Martin’s Press; and Menkhaus, Ken. 2014. “If Mayors Ruled Somalia.” Nor- be willing to embrace hybrid, “good enough” solu- dic Africa Institute, Policy Note 2. In 1996, the Mayor of tions, collaborating with both state and non-state Hargeisa, Hashi Elmi, was awarded the UN Habitat Scroll of Honour Award for his work developing a planned neigh- actors as needed. For the government, this means borhood for returning refugees. condoning, at least as an interim strategy, the con- 13. Rift Valley Institute (2019). 14. Andrews, M., L. Pritchett, and M. Woolcock. 2017. cept of a “third-party service delivery” model, com- Building State Capability: Evidence, Analysis, Action. Ox- mon in a number of countries like the United States, ford University Press. 15. Young, Dennis. 2007. “Third Party Government.” In in which the government partners with or outsources Steven Ott and Lisa Dicke (eds.), 2015, The Nature of the delivery of critical services to the private sector.15 the Nonprofit Sector. 3rd ed. Boulder: Westview Press; and Aspen Institute. “Non-Profits as Contractors for Local This approach requires all stakeholders to come to- Governments; Challenges and Benefits.” Snapshots No. gether and agree on the formal rules, norms, and 445 (March). 35 36 Enhanced Risk Management he World Bank Group (WBG) corporate (MPF) and the growing International Development T portfolio analysis continues to indicate a high level of performance of the Somalia portfolio. Much of this success can be attributed to Association (IDA) portfolio will help in building back better and recover from the impact of the crises fac- ing Somalia. The MPF and IDA portfolios (a) lever- the work of the client in working with task teams and age each other’s strengths to use resources effec- the fiduciary teams, adapting WBG process to the tively, efficiently and equitably; (b) maximize impact context, as well as providing ongoing support to the for Somalia’s sustained economic reforms; (c) and implementing units. offer innovative approaches to institution building Working through country systems with recipient- and inclusive growth in Somalia. The WB’s ability executed investments, the preferred modality for to rapidly adapt and tailor the management of MPF WBG operations globally, bears challenges in So- and core IDA financing is one of its fundamental malia, especially as the Bank’s portfolio diversifies strengths. and decentralizes. This way of working has required the government to rapidly develop systems and pro- cesses in line with WBG requirements. It has also required the government to rapidly build its capaci- ties to execute projects along the fiduciary standards required in WBG operations. Somalia remains among the most complex fra- gility, conflict, and violence (FCV) contexts in which the World Bank (WB) is engaged. Having cleared arrears and reached its Heavily Indebted Poor Countries Initiative (HIPC) Decision Point in March 2020, Somalia’s development financing aims to sup- port an ambitious agenda which is central to moving the country towards greater stability and more inclu- sive development—underscoring the importance of building resilience and the need for flexible instru- ments to respond to Somalia’s unique operating en- vironment. The strategic alignment of the Multi-Partner Fund 37 Enhanced Risk Management Financial Management Strengthening Portfolio Financial Management Integrity Background During the period, the team participated in the The WB Financial Management (FM) function Country Management Unit–led Country Portfolio has dual objectives that are closely intertwined— Performance Review (CPPR) to which key action support recipient countries improve their financial points were agreed. The team continues to focus on management performance and capacity while en- helping counterpart PFM institutions develop sound couraging public disclosure and transparency as financial systems and practices across the portfolio. well as provide reasonable assurance on the use of Efforts are dedicated towards strengthening PFM financing proceeds. Sound public financial manage- systems with emphasis on (a) legal framework; (b) ment (PFM) remains central in ensuring account- planning and budgeting; (c) banking and funds’ flow ability and efficiency in the management of public arrangements; (d) systems risk–based internal con- resources and is an essential underpinning to im- trols frameworks; (e) accountability processes and prove governance and fight corruption, more impor- procedures; (f) fiscal and financial reporting; (g) ex- tantly in Somalia’s FCV context. In Somalia, the FM ternal audit and oversight; and (h) PFM/FM staffing. function is fully aligned to country systems across all From the various FM reviews during the period— the operations; it continues to be an integral part of financial management implementation support re- the development process and the country’s institu- view missions, quarterly Interim unaudited Financial tional strengthening efforts. At the Federal Govern- Management Reports (IFRs), external audit by the ment of Somalia (FGS) and Federal Member State Office of the Auditor General, CPPR—the WB FM (FMS) level, the FM staff collaborate with the Ex- team, jointly with government counterparts, has ternal Assistance Fiduciary Section (EAFS) under identified the pertinent FM/fiduciary risks and atten- the respective Offices of the Accountant General/ dant mitigation measures. Treasury, Budget Directorates, Offices of the Audi- tor General, and Civil Service Commissions to help Risk-Based Approach strengthen their FM capacities. In accordance with Risk-based approaches are adopted in identify- the Bank’s operational policies and procedures, the ing and assessing country, implementing entities, FM team continues to work with counterpart part- and project-specific FM risks. To effectively iden- ner institutions to design financial management and tify and manage potential risks that may affect the disbursement arrangements, supervise and support implementation of effective PFM/Fiduciary arrange- the performance of the operations at FGS, Somalil- ments, country PFM assessments (country, imple- and, and FMSs. The FM support spans across the menting entities, sector specific, and project level) current portfolio consisting of 18 active projects with are undertaken in good time to inform the design commitments of over US$0.980 billion, nine pipeline of implementation arrangements. The PFM assess- projects with estimated commitments of US$0.443 ments contribute to key decisions on the intensity of billion implemented through country systems by preparation and implementation support and inform government institutions, private sector vendors, the development of PFM systems development and United Nations agencies, and international nongov- mitigation strategies to address key weaknesses ernmental organizations. and risks. In conducting the assessments, key con- 38 Enhanced Risk Management sideration is given to the need to design sustainable missions for each of the projects are undertaken at fiduciary oversight and PFM capacity development. least once every six months, to which the findings This is done by gathering principal information to fa- and risk ratings contribute to PFM implementation cilitate design of appropriate contextual frameworks support reports, aides-memoire, and Implementa- and design, scalable response, speed, and effective tion Status Reports (ISRs)—all of which are shared monitoring of operations and risks. The PFM/fidu- with the client and development partners. The proj- ciary risks are assessed at the beginning of each ects’ financial management arrangements and risks project and progressively monitored and updated are periodically updated and monitored through the throughout the project cycle as part of the projects’ WB FM system through which IFRs and annual au- implementation support. The FM risk model has a dited financial statements are electronically submit- qualitative focus and takes into consideration princi- ted. Key innovative FM/fiduciary interventions inte- ples embodied in internationally recognized ‘best fit’ grated into the project designs are summarized in practices. Specific project implementation support Box 1 (overleaf). 39 Enhanced Risk Management BOX 2 Key Interventions Integrated into Project Designs l Performance-based conditions integrated in System (E-DMS) is supporting full automation the Central Bank of Somalia (CBS) component and controls of essential security documents, under the Somalia Capacity Advancement, planning, and cash management as well as Livelihoods and Entrepreneurship, through IFMIS data analytics business intelligence to Digital Uplift Project (SCALED-UP) additional support management decision making. financing aimed at (a) fostering CBS financial l Under the Domestic Revenue Mobilization and independence and transparency; (b) strength- PFM Capacity Strengthening Project (DRM/ ening the Anti-Money Laundering/Combating PFM) and in line with the International Mon- the Financing of Terrorism (AML/CFT) opera- etary Fund program, integration of World Bank tional framework including e-KYC; (c) extend- (WB) projects’ FM function into the govern- ing CBS corresponding banking arrangements mentwide PFM systems (IFMIS) and controls to mitigate overdependence on single chan- including integrated fiscal reporting (govern- nels; and (d) extension of CBS services and ment and projects). The WB quarterly Interim operational systems to FMSs. unaudited Financial Management Reports are l Govetech initiative supported by SCALED-UP generated from the government IFMIS at FGS, to automate documents’ management within Puntland, and Somaliland. the Office of the Accountant General and Ex- l Collaboration between the financial manage- ternal Assistance Fiduciary Section (EAFS) ment team and the newly established internal units. The Electronic Documents Management audit function under the DRM/PFM project. This approach provides hands-on training op- portunities to integrate the government internal audit function (risk-based systems audit) as part of the project risk management. This ap- proach has successfully been piloted in Punt- land with quality internal audit reports prepared for three projects with agreement to scale-up and replicate the arrangement in the other re- gions. l Mainstreaming the critical PFM/ICT (IFMIS) staffing with the Capacity Injection Modality (CIM) implemented under the Capacity Injec- tion Project. The CIM-aligned salaries for the EAFS staff in Puntland and FGS are co-fi- nanced by government revenue/RCRF project. 40 Enhanced Risk Management FM/Fiduciary Engagement Model A pragmatic approach combining a Short-Term Financial Management Consultant (STC) provid- ing support to the PFM/fiduciary team in the Bank has been deployed. The team is further supported through a team of STCs deployed through a third- party platform to facilitate effective ‘on the ground’ PFM/fiduciary support to the client teams beyond areas of Bank corporate security limitations. In the wake of the COVID-19 pandemic, the third-party platform has shifted to hybrid implementation sup- port leveraging on technology, with the recent vir- tual review concluded in early December 2021. Currently, the team is conducting a field-based fi- nancial implementation support and it is expect- ed to be concluded by the end of September 30, 2022. The reports from this mission will be shared tion and delivery to the Board within the financial with government and internally enable the project year. teams to support the government more effectively. l Accelerate the consolidation and extension of the The next review is planned for March/April 2022. EAFS FM role, and reorganize PFM/FM techni- The team interfaces with the third-party Monitoring cal assistance to the PIUs at FGS, FMSs, and Agent majorly, focusing on verification of outputs to Somaliland. which reviews from the financial performance are l Provide technical FM review contributions to the comprehensively reconciled with the findings of the pay and grading outputs currently in preparation monitoring agent. Joint Bank/government/Monitor- through the Somaliland Civil Service Strengthen- ing Agent forums will be strengthened to ensure pro- ing Project and Capacity Injection Project to be vision of timely implementation support/monitoring approved through a Cabinet ordinance. feedback to the government teams. l Support government review and update the EAFS Manual and COPAM to address gaps on Next Steps operations expenditures and travel policies at In the next six months, the FM team will be focus- FGS, FMSs, and Somaliland. ing on the following key activities: l Initiate consultations and discussions on the de- l Finalize and transmit to government the August– livery of ‘Use of Country Systems’ paper based September 2022 FM implementation support re- on the Somalia experience. view mission reports as well as implementation of FM-related recommendations emerging from the 16. Provides clarity on mandates, vision, mission, func- recently concluded CPPR. tions, accountabilities, structures, staff complements, and establishment ceilings of each MDA including EAFS units. l FM assessments and design of FM arrangements 17. The paper is proposed for delivery before the end of for the nine pipelines’ operations under prepara- June 2023. 41 Enhanced Risk Management Monitoring Agent average. This increased to US$631 million on aver- age during FY 2020–22. Portfolio Risk Profile Project size and complexity is increasing. The Risk ratings for WBG Somalia projects are con- average size of projects has increased from US$19 sistently amongst the highest of all World Bank million during FY2014–19 to US$82 million during country portfolios. The projects are planned and 2020–22. Larger investments are made in trans- implemented amidst a fragile governance environ- actional intensive services and social sectors with ment and the political impasse, which lasted until difficult-to-monitor outcomes. Infrastructure invest- the 2022 elections, was a reminder that Somalia’s ments are rapidly being scaled up. Investments are longer-term trajectory towards stability is nonlinear, increasingly implemented by regional and local gov- as is the case in many fragile and conflict-affected ernments, spread out across larger geographies in situations (FCS). Managing the Somalia portfolio an already difficult and inaccessible landscape. The risks requires deliberate and sustained efforts, both number of projects has grown at a slower pace, as on behalf of the government and of the WBG teams. the portfolio has been consolidated around larger The risk exposure volume is increasing rapidly. investments. After Somalia regained access to financing from the From a strong focus on governance projects pri- IDA, the portfolio commitments have increased, le- or to the IDA reengagement the portfolio now has veraging continued MPF support. During FY2014– significant investment projects in human and social 19, the annual commitment was US$73 million on development, which need to deliver tangible results 42 Enhanced Risk Management for Somalis on the ground at a national level. These latory frameworks, bureaucratic capacities, as well investments bring with them a projected shift in risk as codified knowledge, data, and reliable informa- focus, exposure, and required mitigation measures. tion. Some program objectives nevertheless require Projects are reliant on core government capac- political decision-making capability. Variations of ity which is not evolving at the same rapid pace as political impasse have, over the years, delayed im- the scale-up of the portfolio. The projects are imple- portant actions, for example, law making and setting mented in an environment with nascent institutions. new directions. Legal and regulatory frameworks are being newly Results to date demonstrate that the portfolio is developed or significantly reformed. Projects are adept at managing risk and delivering results amidst reliant on core government systems including the difficult circumstances. Continued deliberate risk Financial Management Information Systems (FMIS) management efforts are necessary to maintain this established at federal and state levels that are not track record. interoperable, limiting the application of systemwide workflows and controls. While projects implement Risk Management Role additional measures to compensate for the institu- of the Monitoring Agent tional capacity constraints, a further scale-up will The WBG continues to engage Abyrint as the require strengthened measures. Third-party Monitoring Agent to support holistic risk Governments face increasingly complex chal- management. Abyrint provides an additional and lenges across all stages of project management third-party layer of monitoring and assurance to en- as the nature of investments becomes more com- sure that funds executed by the Somali authorities plex and diverse. There are an increasing number are utilized for the purposes specified. Issues are of service and infrastructure contracts for which the proactively identified, analyzed, and resolved. development of robust scope of work specifications Critical reviews of supported transactions are the is complex, as is proper application of procurement bedrock of the program. Feedback and corrections process requirements. Governments also face chal- safeguard World Bank project funds while support- lenges to verify the quality of services and works ing improvements to government systems. delivered. Transaction level financial monitoring is employed The COVID-19 pandemic continues to heighten for 100 percent of WBG financing to recurrent costs certain risks. Government- and WBG-led fiduciary of the federal and state governments. These costs risk mitigation measures may still be impacted are executed fully through the Use of Country Sys- through travel restrictions, which may also negative- tems and include salary payments for civil servants ly impact the quality of policy dialogue and restrict as well as health and education sector workforces technical support modalities, impacting the quality across the country. The monitoring of these flows of project implementation. enables both preventative and detective risk man- The political impasse was experienced through- agement to lower fiduciary risks and enable the safe out much of the reporting period and a new govern- and recurrent cost support that enables government ment has since been formed. At the outset, projects operations and social sector service delivery. are designed to compensate for many institutional WBG support to governments to rebuild and challenges, such as lack of predictable policy, regu- strengthen core state functions is bolstered through 43 Enhanced Risk Management insight into the performance of country PFM sys- under discussion/finalization. tems, gained through fact-based and continuous In the proposed project for Enhancing Public Re- study of system performance, and the development source Management Project (SERP), which is at an of timely and practical recommendations to inform advanced stage of preparation, a subcomponent reform priorities and the design of appropriate mea- has been included to support capacity building of sures in government, project, and portfolio. PFM staff. Project reviews, analysis, and recommendations The Bank has continued to support the projects’ are directed at lowering risks and enhancing imple- procurement staff in the country to build their capac- mentation across the portfolio. Strategic reviews ity through informal guidance/reviews, telephone and studies leverage information and generate calls, WhatsApp, Webex, and other online exchang- unique insights into state-building and reforms for es. In June, the Bank conducted a six-day virtual WBG portfolio management, and for governments’ procurement training for all the Somalia Bank-fund- strategy and implementation. ed projects. Procurement topics covered included Contract Negotiations/Management, Preparation of Procurement Bids/Evaluation of Bids, Preparation of Proposals/ Evaluation of Expression of Interests and Propos- Procurement Capacity Development als. With support by STCs, more training sessions A Concept Note that is aimed at addressing exist- have been planned for the next Financial year. ing procurement capacity challenges under the So- malia portfolio has been finalized. However, to inte- Procurement Integrity grate both the enhanced supervision/hand-holding, To sustain improvement in financial integrity in capacity building/training and any analytical work WB-funded projects, the Bank has continued creat- needed, the Concept Note is now being converted ing awareness among the government, private sec- into Advisory Services Analytics (ASA). The draft tor, and other stakeholders on key issues regarding procurement ASA has been prepared and is now integrity, procurement, and financial management. The awareness is being emphasized during the vir- tual project Implementation Support Missions. The Bank has started involving ‘Probity Advisors’, where appropriate, during the client procurement process. This has already been piloted in the ongoing recruit- ment under SURP II where the Probity Advisor was involved in the shortlisting/evaluation/contract ne- gotiation process of the consultant firms. The out- come has been discussed across the portfolio. Due to positive outcomes, other projects have agreed to involve Probity Advisors where appropriate. Their involvement will ensure that the appropriate proce- dures and scrutiny are in place to maintain the client integrity of the procurement process. 44 Enhanced Risk Management BOX 2 Communications Visibility Plan he main aim for communications in FY22 T was to draft the Communications Visibility Feature Articles l Re-engaging with Somalia for Long-Lasting Development Plan (CVP), establish regular contact with donor Outcomes focal points, and increase communications output l Somalia’s Women Voices: Pushing for Gender-Inclusive to external audiences. Representation The CVP is a collaborative and iterative docu- l Somalia’s Businesses Tap Solar Energy to Expand, ment with the overall goal of improving the vis- Boosting Economic Growth ibility and accountability of the MPF and deepen- l Going Digital Makes Life Easier for Somalia’s Business ing support amongst key stakeholders throughout Owners the lifecycle of the program. It includes sections l Improving Somalia’s Unemployment Through Creative on key messages, communications activities, Self-Employment branding and evaluation and was developed in 2021 and shared with donor communication focal Blogs points on November 16, 2021, for comments. l What resilient Somali residents are telling us about CO- In early 2022 the team developed a content VID-19 and economic recovery matrix to support the CVP of ongoing commu- l Breaking the cycle – Supporting inclusive access to more nications activities to anticipate until the end of and better jobs in Somalia FY22. It was presented for the MPF Consultative l Marking International Women’s Day: Why women and girls Group on March 17, 2022, and the feedback re- matter in Somalia’s climate crisis ceived was incorporated and presented again at l Want to keep internally displaced people in Somalia out of the MPF Retreat in April where it was endorsed. poverty? Increase women’s economic opportunities Some of the communications activities from l Voices of women entrepreneurs in a changing Somalia this reporting period were: l The importance of Somali women in leadership for sus- tainable development and peace Events/Roundtables l Changing patriarchal Somali culture, one business at a time l Forum for Ideas Webinar: Somalia Country l Resilience during the COVID-19 Pandemic: Perspectives Economic Memorandum with Heritage Institute. from Somalia’s Businesses l Plant Trees, Not Plastics: A discussion on the l Pumping oxygen into Somalia’s health system as part of nexus between Climate Change and Poverty in COVID-19 response Somalia. l Mapping climate change and drought in Somalia l Gender Dialogue Series; Roundtable with l Somalia needs its trees to restore landscapes and liveli- women leaders from East African countries hoods to commemorate International Women’s Day l Customs reforms help Somalia increase tax revenue de- 2022. spite COVID-19 and fragility 45 Enhanced Risk Management Procurement Reforms Environmental and The Bank assisted the FGS in developing guide- Social Risk Management lines on emergency procurement. The next support The long-term goal for Environmental and Social required is supporting the FGS in the dissemination Risk Management (ESRM) is to (a) slowly transition, of the guidelines to make the officers in the procur- from traditional reliance on United Nations agencies ing entities understand the procedures to facilitate and third-party implementation partners, to govern- management of emergency procurement. In the pro- ment structures and local consultants and experts; posed SERP, this support has been included. Other and (b) scaffold Environmental and Social Frame- procurement reforms proposed under the SERP work (ESF) and wider ESRM capacity building that include support to the FGS in the establishment of allows focus on local capacity. the Public Procurement Authority (PPA), support The secondment of environmental and social to the National Tender Board (NTB) in Somaliland, specialists across 18 projects in the Somalia port- support to Somaliland and FGS in the finalization folio has meant the evolution of a nascent corps of and dissemination of the Procurement Manual and sustainability experts dispersed in various sectors Procurement Bidding Documents, and support to across different parts of the country. In addition, ex- the development of procurement portals (including panding country knowledge is not only relevant for provision of recurrent subscription fee). ESF management but instrumental to inform project 46 Enhanced Risk Management design choices in general. The WB has conducted prehensive assessment of the state of Somalia’s a successful five-day training for 50 environmental natural resources, environment, and potential cli- and social specialists from across Somalia, who mate risks; (c) Undertaking conservation initiatives have been trained on the precepts and practices of to address urgent challenges in land degradation, the ESF. biodiversity, aquatic and marine environment, and There are changes at the national institutions for climate change; and (d) Enhancing public aware- managing environmental issues in Somalia. The ness, participation, and behavior change on en- Ministry of Environment and Climate Change is a vironmental protection, conservation, and climate new entity, created in early August. It is likely to change. take over the responsibilities that were previously The Roundtable has also proposed that the gov- the prerogative of the Directorate of Environment ernment understand the importance of stability of and Climate Change. The minister, Ms. Khadija Mo- national focal point (NFP) for climate funds, and for hamed al-Makhzoumi, is a former ambassador to operational NFP to be a civil servant in the newly Pakistan and has already assumed office. Admin- created ministry. Additionally, the DPs have pro- istratively, the Directorate was previously under the posed twinning the new ministry, in a form of collab- administrative mandate of the Deputy Prime Minis- oration, with the Ministry of Energy and Water Re- ter. In addition to the new minister, there is a Minister sources (MoEWR) as a strategic partner, and partly of State for Environment, with an appointee who has to align climate financing with priority areas under been a campaigner for climate justice and environ- the Somalia national water roadmap. It is also im- mental regeneration in Somalia for a long time. The portant to note that the United Nations Environment appointments have already been ratified by the Par- Programme (UNEP) is currently leading on the de- liament, meaning they are now legally in office. Both velopment of a two-pager on what the main climate new appointees are young and seem to understand risks and actions points are for the new ministry, and the complexities of Somali environmental space. the Bank can write in support of the policy positions. Development partners (DPs) have come together The Bank is currently considering a decision to con- under the banner of ‘The Friends of Environment duct a technical assistance on scoping and fleshing Development Partner Roundtable’. At its last meet- out the capacity needs for the new ministry. ing on July 20, the Roundtable agreed to canvass At the Bank, the recently-approved task, the ‘So- support for the new government. One way the Bank malia: Capacity-Building for Environmental, Social, and partners can assist the Somali authorities un- and Security Risk Management (ESSRM) in Devel- der the new Ministry of Environment is helping them opment Interventions in Somalia’ aims to strengthen adopt the Somalia National Environment Strategy Somalia’s capacity to manage environmental, so- and Action Plan (NESAP) as a starting point for de- cial, and security risks in development interventions fining climate adaptation priorities. through multipronged efforts. The work encompass- Somalia’s NESAP (2022–2026) aims to accom- es three Pillars, attempting to plish four strategic objectives: (a) Improving en- (a) strengthen understanding of how to apply the vironmental governance and enhancing resource Bank’s ESF in the Somalia context; (b) portfolio-lev- mobilization for the effective management of natural el support including extended coaching and cross- resources and environment; (b) Undertaking a com- learning; and (c) strengthen countrywide ESSRM 47 Enhanced Risk Management working conditions. For land, this includes land ten- ure, land use types, sensitive ecological areas, and so on. Other focus areas will be climate change, la- bor standards, and intrahousehold management of natural resource-based assets, among others. This activity builds on the capacity building vi- sioning paper for how capacity should be built for ESF/ESRM with the FGS and FMSs, with the Of- fice of the Prime Minister and sectoral ministries, for both ESF implementation capacity building as well as more general ESRM capacity leading to sustain- able development interventions. There will be close collaboration with projects where there is strong focus and budget allocation to capacity building and existing works from other partners—the aim is to identify the appropriate in- stitutional setting for developing ESF capacity in the sectoral ministries. The initial concept is to have four ESF-supporting units to be domiciled at the minis- tries of Economy and National Planning; Social De- velopment; Infrastructure; and Production. Security risks internal to projects require analysis and management under the FCV strategy, the ESF, systems. In this reporting period, the focus was on and other operational policies. There is, therefore, a dialogues and background work regarding ESS7/ need for a coherent security due diligence approach Marginalized Communities, ESS2/Labor, and Secu- for Somalia, with a draft approach paper prepared. rity expected to continue in the next reporting peri- Academic and private sector institutions/firms in od; while preparations to commence work on ESS5/ Somalia (for general ESF/ESRM training) and in Land, ESS10/Stakeholder Engagement and overall the region (for special topics) that might be critical government systems strengthening are ongoing. for inclusion in building local capacity for delivering Given that ESF challenges in Somalia are as capacity-building workshops will also be identified, much environmental as they are social in terms of in close coordination with similar activities in other their genesis, and thus need diagnosis for further countries. The goal is to create a learning hub in So- support and development, the output of these ana- malia through a partnership or contract with a local lytical pieces will be integrated social and environ- service provider. This core learning hub may play a ment documents covering approaches to manage key role in supporting the government with project land, labor, security, and grievance redress mecha- preparation and implementation, as well as foster- nisms. For labor, this encompasses aspects relat- ing longer-term institutional learning and systems ed to occupational health and safety and workers’ development for the projects. 48 Enhanced Risk Management BOX 3 Somali Integrated Household Budget Survey: Monitoring Household Welfare T he Somali Integrated Statistics and Econom- Economic Planning Capacity Building project, the ic Planning Capacity Building project pro- World Bank (WB) also provides technical assis- vides support to Somalia’s key official statistics- tance to support implementation to: producing agencies in strengthening the capacity l Support enumerators’ and supervisors’ train- of the country’s National Statistical System (NSS) ing to ensure quality. Frequent debriefs and to collect data for poverty and macroeconomic discussions from training, and practice of pilot monitoring. tests in the field, are also organized. One of the avenues it does this is by support- l Advise the NBS on questionnaire development ing the design and implementation of the Somali to cover important socioeconomic indicators, Integrated Household Budget Survey (SIHBS) ensuring that the data is consistent with inter- for monitoring welfare, providing macroeconomic national reporting standards. After its review to baselines, and establishing a baseline survey for implement changes, the WB’s Living Standard a frequent data collection system. Measurement Survey team also organized a The SIHBS aims to collect detailed information questionnaire clinic to lend the Bank’s 40 years on household expenditures and consumption in- of household survey experience. curred on goods and services to monitor house- l Provide inputs to improve gender data. The hold welfare and measure poverty. In addition to WB team reviewed the questionnaires and welfare data, the SIHBS will collect other socio- provided inputs on sex-disaggregation of data economic data (such as access to basic assets, that can help Somali policy makers better un- facilities, and services), which will help Somali derstand the differences in development out- institutions’ reporting of important national indica- comes of men and women as well as causes tors, such as for 9th Somalia National Develop- of gender inequality in the country. The HBS is ment Plan (NDP9) and Sustainable Development expected to provide new gender indicators re- Goals’ monitoring. Data collected through the SI- quired by the Sustainable Development Goals, HBS will also be used to improve gross domes- such as on land ownership. tic products’ estimates and the Consumer Price l Monitor real time data quality from the field, Index. for instance, weekly meetings to discuss field Much of the survey preparation and imple- progress and data checking. To enhance data mentation took place during the reporting period. quality, the Bank advised the survey team to The survey covers about 7,200 households in 17 produce tables showing outcomes per inter- regions of the country. In addition to financing of viewer and to note discrepancies and possible the survey by the Somali Integrated Statistics and low-performing interviewers for follow up. 49 Enhanced Risk Management Women’s Safety and gation measures to address those risks. A total of 13 Risk Management projects have put in place appropriate prevention, mitigation, and response measures to address GBV/ GBV/SEAH Risk Management SEAH and are monitored throughout project imple- in Somalia mentation. Sensitization and training efforts have Gender-based violence (GBV), including sexual been scaled up during orientation and onboarding exploitation and abuse and sexual harassment of all project implementation units, contractors and (SEAH), remains a significant concern in Somalia. their workers, grievance committees, and GBV focal Development projects, including Bank-supported points with information on the projects’ GBV/SEAH- operations, can exacerbate existing risks or create related risks, potential mitigation measures, includ- new risks of GBV, including SEA). ing prohibited behavior, details on how to report al- Since 2017, the Somalia portfolio has been in- legations of SEAH, and how to access GBV service tensifying its support on GBV risk management providers. across projects by identifying and understanding Progress during the reporting period includes: project-related and existing contextual risks linked l Three projects (COVID-19 AF, Barwaaqo [former- to GBV/SEAH. Emphasizing such an effort ensures ly Biyoole 2], and RCRF III AF), assessed with that Bank-supported projects do not contribute to or moderate to substantial risks of SEAH, have de- exacerbate existing dynamics or vulnerabilities per- veloped comprehensive GBV/SEAH Prevention petuating violence. Such an approach is also critical and Response Action Plans. The action plans de- for development of appropriate prevention and miti- tail the necessary operational measures and pro- 50 Enhanced Risk Management tocols to address SEAH and other forms of GBV. They include information on how to handle any SEAH allegations that may arise and procedures for preventing and responding to SEAH. l Capacity building on GBV risk management: Codes of Conduct (CoCs), the project’s Griev- ance Mechanisms, were conducted for the SCRP, Biyoole, RCRF, SURP II, and Damal Caafimaad projects. These training sessions reached a to- tal of 1,519 (1,185 females and 334 males) proj- ect workers, consultants, female health workers (FHWs), contractors’ staff, call center operators, grievance redress committees (GRC), supervi- sion team (UNOPS), Municipality authority, po- lice, community members, and GBV focal points. l The SCRP project has also made efforts to en- across the three states (Galmudug, South West gage female contractors. Of the 12 contractors State, and Puntland). Together with the GBV fo- onboard, two were female owners and manag- cal points, the Bank team has conducted women- ers of the construction company. The contrac- only focus group discussions with eight women tors have also encouraged female laborers to be (six female community members and two Village recruited in river embarkment works. About 36 Development committee [VDC] members) in female casual laborers were engaged across dif- the Rabaable Puntland state of Somalia. These ferent states (South West State, Hirshabelle, and aimed at identifying issues affecting the commu- Jubbaland). nity concerning the project as well as for the focal l CoCs for the SCRP, Damal Caafimaad, and Bi- points to get an idea of how to facilitate such a yoole projects have been revised to include spe- session given the sensitive nature of GBV. cific prohibitions against SEAH, including prohi- l The SURP II project has continued to conduct bitions against any sexual activity or misconduct Toolbox talks/sensitization and safety require- with anyone under the age of 18. These CoCs ments provided in all municipalities daily by the have been approved by the Project Coordinators contractor and PIU team to all workers. The under the different line ministries. So far, orienta- Toolbox talks included discussions such as road tion and signing of the CoC for SURP II, Damal safety measures, SEAH prevention and mitiga- Caafimaad, Biyoole, and SCRP has reached a tion mechanisms, GBV service availability, fa- total of 677 (117 females and 560 males) per- miliarization of CoCs, and the GRM process and sons from contractors, PIU, State Project Teams OHS. Approximately 44 Toolbox talk sessions (SPTs), consultants, workers, and security per- have been conducted in the three municipalities sonnel. of Garowe, Kismayo, and Baidoa. Also, the PIU l The Biyoole project has engaged three female in- team has printed and distributed posters with terns to support GBV/SEAH risk mitigation work GBV/SEAH messages highlighting critical provi- 51 Enhanced Risk Management sions of the CoC and reporting options for any safety, barriers to reporting, and responsiveness survivors, including hotline numbers for com- of the grievance mechanism to survivors of SEA/ plaint reporting. The messages were shared with SH in the next reporting period. PIUs, contractors, and the supervision team. l A focus group discussion with female project The Somalia Women’s workers from the RCRF, Damal Caafimaad, Empowerment Platform SCRP, and Statistics projects was undertaken to The WB established the Somalia Women’s Em- understand the existing limitations and barriers to powerment Platform (also known as the Somalia reporting incidents of SEAH within the projects Gender Platform) in June 2021 in an effort to deepen despite general concerns being raised and un- and strengthen strategic engagement on women’s derreporting. The session was aimed at creating equal opportunities across operations and analytic a safe environment where female project workers initiatives. The Gender Platform is a multiyear and can raise their issues and concerns freely in a multisectoral initiative that aims to assist the WBG’s confidential manner as the team explores how to engagement in Somalia by promoting gender equal- tackle these challenges and appropriate mecha- ity and inclusion of those left behind more broadly. nisms to advocate for change within different It does so by increasing technical support to opera- ministries. The Somalia portfolio is expected to tions, conducting frontier research, identifying inno- conduct a rapid assessment of the accessibility, vative interventions, expanding policy dialogue, and 52 Enhanced Risk Management sharing knowledge across government and relevant lence of GBV and other harmful practices, such as development partners. female genital mutilation/cutting, is high. The platform has conducted grounding analyti- Platform activities will include support for devel- cal work for the WB’s engagement on gender, as opment of gender inputs for the Somalia Climate well as provided targeted technical support to Bank- Change Program, potential additional analysis for supported operations. As aligned across the three the social norms and behavior-change impact eval- main pillars of the Platform, work achieved includes uation in partnership with the Gender Innovation the following. Lab, and potential support for addressing the gen- Deepening the integration of gender into WB der dimensions of the current drought crisis. operations in Somalia: During the reporting period, Communication and outreach campaign: The the Somalia Gender Platform provided six pipeline Somalia Gender Platform has undertaken several projects with technical support to meet gender tag external facing events on what works to address requirements, with additional recommendations on women’s economic empowerment and GBV. In ad- how to deepen focus on strategic gender challenges dition, to celebrate International Women’s Month, and opportunities. The Somalia Platform also co-or- the Platform launched a high level ‘Blogathon’ cam- ganized three Regional East Africa learning events. paign, with a mix of seven internal and external In addition, three technical training sessions were blogs between March to May 2022, on addressing delivered for WB task teams on Bank requirements women’s empowerment and highlighting findings for the integration of gender considerations, through from recent analytical work. The blogs presented the WB corporate gender tagging. new research from the WB around supporting more Analytical work: The Platform team prepared a and inclusive jobs for women and men, findings on policy note on key gender issues as part of a set of women’s role in keeping displaced people out of policy briefs to be presented to the incoming govern- poverty, and data on how COVID-19 affected wom- ment of Somalia. This policy brief has since been en in Somalia. The series also had voices of youth used by task teams to provide analysis on critical activists and successful women entrepreneurs pro- gender gaps that can inform gender-informed proj- filed to further encourage and inspire young women ect design. It has also been used to inform external and girls to break barriers, while connecting these facing products, such as an ongoing gender stake- viewpoints with the WB’s development objectives in holder mapping. Somalia. The team conducted a gender portfolio review The Platform team focused the first year on the of 21 projects from the Somalia portfolio (select- establishment of the Platform, key analytic pieces, ing projects active as of August 2021). Operations outreach and engagement initiatives, and collection addressing gender inequality in Somalia focus on of evidence on critical gaps as well as implemen- constraints in human endowments and economic tation strategies with potential to address gender opportunities, in line with the WB Gender Strategy; challenges in Somalia. The Platform will consolidate there are limited activities, however, that address these efforts in Year 2 to develop opportunities to pi- voice and agency. This is a cause for concern in lot innovative programming to address gender chal- the Somalia context, where women’s participation in lenges in Somalia, including opportunities both with public and private decision making is low and preva- Task Teams in the Bank and with external partners. 53 54 MPF Financials s of June 30, 2022, donors had committed a The MPF has disbursed a total of US$361.8 mil- A total of US$573.2 million to the MPF, of which lion, representing 66 percent of paid-in contribu- US$548.4 million had been paid in. US$569.2 mil- tions. A majority of the disbursements have been lion has been committed for (a) signed project for project grants (US$302.6 million, 84 percent). grants (US$459 million); (b) preparation, supervi- Of these grants, most have been recipient-executed sion, and monitoring of endorsed MPF pipeline and (US$255 million, 84 percent) and implemented by active projects (US$45.8 million); and (c) trust fund Somali authorities. In addition to grants, funds have management and administration (US$23.8 million). been disbursed for management and administration In January to June 2022 a total of US$220.3 million (US$22.1 million, 6 percent) and preparation, super- was disbursed from the MPF to projects. This finan- vision, and monitoring by WBG teams (US$37.1 mil- cial overview does not include funds from IDA. lion, 10 percent). Table 4. MPF Financial Overview As of June 30, 2022 (in US$ million) Contributions................................................................................................................................................. 573.2 Paid-in.....................................................................................................................548.4 Unpaid.......................................................................................................................13.8 Investment Income....................................................................................................10.9 Commitments................................................................................................................................................. 569.2 Management and Administration. ..............................................................................23.8 MPF Administration.......................................................... 11.7 HQ Central Fee................................................................12.2 Preparation, Supervision, Monitoring........................................................................45.8 Project Preparation and Supervision...............................20.6 Monitoring Agent..............................................................25.1 Project Grants.........................................................................................................459.0 BE Grants........................................................................31.7 BE on Behalf Grants........................................................22.5 RE Grants......................................................................404.8 Appraised but Not Signed.........................................................................................40.5 Disbursements.............................................................................................................................................. 361.8 Management and Administration. ..............................................................................22.1 MPF Administration............................................................9.9 HQ Central Fee................................................................12.2 Preparation, Supervision, Monitoring........................................................................37.2 Project Preparation and Supervision...............................20.1 Monitoring Agent..............................................................17.0 Project Grants.........................................................................................................302.6 BE Grants........................................................................25.1 BE on Behalf Grants........................................................22.5 RE Grants......................................................................255.0 55 MPF Financials Figure 2. Total and Average Monthly Disbursements (MPF and IDA) (in US$ million) 160 20 18 140 16 120 14 100 12 80 10 8 60 6 40 4 20 2 0 0 СY14 СY15 СY16 СY17 СY18 СY19 СY20 СY21 СY22 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 IDA net 30 111 64 87 MPF Disbursement 10 24 38 62 75 38 32 50 18 Avg Monthly Disbursement 2 2 3 5 6 6 12 10 18 56 MPF Financials Figure 3. Pledged vs. Paid-In Contributions to the MPF (in US$ million) European Union United Kingdom Norway Sweden Germany Denmark Switzerland Finland USA SPF Italy 0 10 20 30 40 50 60 70 80 90 100 110 120 Contributions ITA SPF USA FIN SWI DEN GER SWE NOR UK EU Pledged 3 8 14 14 19 35 74 80 90 105 120 Paid-in 3 8 13 14 19 35 74 74 90 98 120 57 58 Looking Ahead he drought and humanitarian context is pro- The Retreat in April 2022 has shaped the next phase T jected to remain dire, and the Multi-Partner Fund (MPF) will aim to share information on both the status of the drought and the response of the MPF alongside the International Development Association (IDA) portfolio, and the integration of the MPF in the wider IDA portfolio is expected to by government and partners. With four failed rainy be concluded by the end of the calendar year. The seasons, close to half of the population (45 percent) Performance and Learning Review (PLR) will help is expected to face food shortages or famine in the guide the delivery of more resources in MPF focus coming months, an estimated 7.8 million people, or areas; set the stage for, or enable, larger invest- half of the population, are severely affected. The ments through IDA; and manage risks—fiduciary, Russia-Ukraine conflict has contributed to higher in- environmental, and social—and government capac- flation and higher cost of imports, further worsening ity to manage risks. Discussions during a planned the food insecurity. The World Bank has financed MPF retreat with the Consultative Group will further close to 30 percent (US$340 million) of the response advance the integration of IDA and MPF resources by frontloading, reprogramming, and adding addi- and approaches. tional financing, working closely with United Nations Building on the MPF-supported joint public fi- (UN) agencies and partners. It is planning to deliver nancial management (PFM) assessment, the Bank additional resources under the MPF-supported So- team will engage MPF donors on a strategic discus- malia Urban Resilience Project program series. sion around longer term PFM support to the Federal Despite the crises of the past two years and con- Government of Somalia and the Federal Member tinued fragility and high-intensity conflict, Somalia States. The MPF has been a critical partner in sup- has remained on track toward its Highly Indebted porting this important agenda, and discussion dur- Poor Countries (HIPC) completion point, and it is ing the next reporting period will focus on a second expected to reach this milestone in 2023. Impor- phase of the Bank support to the entire Somalia tant economic reforms have been finalized with the PFM system. support of the World Bank Group (WBG) and it will The pipeline for FY23 will push for greater re- continue to support the government to assess the gional integration, and focus on drought response progress towards HIPC and post-HIPC scenarios to build economic and social resilience. Additional for financing important development reforms. Financing will be important to strengthen the sys- The MPF will also continue to support and tems at the core, and build the capacity of govern- strengthen institutions for service delivery and build ment to manage resources and invest in the future resilience and opportunities in the economic space. of Somalis. 59 Looking Ahead Providing enhanced implementation support and 2020, IDA has been pivotal in supporting the country supervision will be important to ensure high qual- to meet both its crisis and its longer-term develop- ity delivery of the operations for the beneficiaries in ment needs, building on a strong MPF-supported this high-risk context. Due to COVID-19 restrictions, foundation. This foundation plays a critical role in teams will continue to rely on enhanced supervision managing the risk in the growing portfolio and man- and monitoring arrangements. ages capacity and incentive constraints in a fragile The MPF has helped bring government systems and contested context. Normalization with IDA per- back into play, increase government ownership, and mitted access to Turn-Around Regime (TAR) funds enabled harmonization of policy dialogue. However, and to grants from the IDA Regional and Crisis Re- areas for improvement remain. Some among these sponse Windows. This rapid scale-up has brought a are responding with more flexibility to the dynamic 12-fold increase in the portfolio, from US$144 mil- and difficult operating context; having a more col- lion in FY19 to US$1.8 billion today. The task teams laborative approach, for instance, in expectation work closely with the government and partners in management and donor involvement; linking more managing high fiduciary and security risks and using explicitly to the political processes—supporting fragility, conflict, and violence (FCV) tools and the broader macro dialogues with financing; better support of the MPF as increased attention is needed portfolio risk management and knowledge manage- to manage fiduciary and security risks. ment; and aggregating monitoring and evaluation of Going forward, the MPF will continue to deliver project level outputs to outcome level results across an integrated IDA-MPF portfolio, with a focus on: portfolios. l Enhanced policy dialogue platforms to link the Following Somalia’s HIPC Decision Point in March analytical work closely to the investment pipeline Table 5. Lending Projects’ Details S. Project ID Project Name Total No. (US$ million) 1 P179775 Somalia Urban Resilience Project (Phase II), 50.00 Second Additional Financing 2 P176434 Somalia Currency Exchange Project 40.00 3 P177627 ‘Barwaaqo’18 Somalia Water for Rural Resilience Project 70.00 4 P174889 Somalia Inclusive Growth DPO Series 100.00 5 P177298 Somalia Enhancing Public Resource Management Project 50.00 6 P178032 Somali Sustainable Fisheries Development Project 50.00 7 P173119 Horn of Africa Infrastructure Integration Project 63.00 8 P176181 Horn of Africa Digital Integration Project 80.00 18. Formerly Biyoole II. 60 Looking Ahead beyond the Bank and inform client decision making. es the frequently recurring cycles of natural disas- l Robust knowledge work to catch up on 30 ters that impede development and foster exclusion years’ absence of core Bank analytical products and contribute to Somalia’s fragility trap described and inform investments and sector reforms. in the 2018 Systematic Country Diagnostic (SCD, l Integrated risk sensitive portfolio delivery in P155548). The revised Country Partnership Frame- a high-risk context with professional services, work program reflects the WBG’s Strategy for Fra- enhanced fiduciary risk management/Monitoring gility, Conflict and Violence 2020–2025, notably by Agent, a security platform for client engagement, remaining agile, focusing on Somalia’s fragility driv- enhanced ESF capacity, and so on. ers, and adopting FCV–sensitive tools for portfolio l Pooling funds for greater impact and testing management. The Bank is also embarking on a new concepts to take to scale: co-mingle donor and strategy process over the course of the fiscal year IDA resources for greater aid coordination and by June 30, 2023. This process will include intensive influencing the IDA portfolio. consultations with the new government and devel- The MPF Focus Areas and the Focus Areas of opment partners. the wider Bank portfolio have been aligned with a The end of this reporting period has seen the stronger focus on urban resilience in the MPF. The MPF continue to provide a platform for expanding PLR adjusts Focus Area 1 to better capture WBG the government’s ability to engage in the develop- efforts to build core government systems and ex- ment of the country. As the portfolio moves beyond pand social services during the recovery. It splits core economic institutions and further into service Focus Area 2 into a new Focus Area 2 supporting delivery, the MPF continues to lay the foundations inclusive, private sector–led growth and a Focus for sustainable poverty reduction and economic de- Area 3, on strengthening resilience which address- velopment. 61 62 Appendices APPENDIX 1 MPF Monitoring Framework: 2022–2024 (A) MPF OPERATIONAL PERFORMANCE As of June 30, 2022 QUALITY OF OPERATIONS Target Status Disbursements Total MPF disbursements to date (US$ million) – 361.8 Total disbursements by calendar year (US$ million) MPF IDA – 2014 10.3 – 2015 24.4 – 2016 38.0 – 2017 62.2 – 2018 75.0 – 2019 37.8 29.8 2020 32.0 111.219 2021 50.4 63.9 2022 18.43 87.2 Commitment ratio of paid-in donor contributions – 97.5% Disbursement ratio of signed project grants 20 a: Including RCRF – a. 66% b: Excluding RCRF b. 55% Timeliness Average # of months from SDRF endorsement < 4 months 5.9 to first disbursement Portfolio quality % of active operations rated 90% 95% moderately satisfactory or higher WORLD BANK MANAGEMENT Target Status Consultation % of MPF projects that have been consulted 100% 100% with relevant Working Groups during design # of total MPF Consultative Group meetings 6 9 DONOR ENGAGEMENT Target Status Limited preferencing % of MPF contributions preferenced by donors < 30% 26% Pledge predictability Donor payments on schedule (% of total funds paid 100% 100% according to Administration Agreement schedule) CROSS-CUTTING ISSUES Target Status Gender Gender considerations integrated into MPF portfolio NA 75% mainstreaming (% of MPF projects with World Bank gender flag)21 Capacity building % of active projects with a 100% 100% capacity development component Conflict sensitivity % of MPF projects that utilize conflict analysis to inform 50% 100% project management, going beyond basic World Bank requirements for project preparations 19. This excludes the DPO in CY20. 20. This is only for the MPF. 21. MPF projects and analytic activities are reviewed and assessed by the World Bank to systematically consider and address gender inequalities in (a) the underlying analysis; (b) the actions proposed; and/or (c) monitoring and evalua- tion arrangements. If a positive response is recorded in at least one of these three dimensions, the operation is flagged as gender-informed. 63 Appendices (B) MPF RESULTS FRAMEWORK: 2022-2024 As of June 30, 2022 MPF Focus Area: Cross-Cutting22 Objective 0.1: Policy Dialogue and Knowledge Indicator Unit of 2022 2023 2024 Data Source Measure 0.1.1. Knowledge products developed Number Target 5 5 5 Relevant ASA reports and disseminated: Seeks to inform including: Enhancing the evolution of the portfolio and Actual 5 Governance Dialogue; broader policy dialogue on key Capacity Building on issues related to MPF objectives. Financial Management and 0.1.2. Policy dialogues facilitated on key Number Target 4 4 4 Procurement; Gender issues of relevance to the MPF Platform objectives (disaggregated by Actual 4 Responsibility: Respective intergovernmental and international Task Team Leaders (TTL) partners). Description of Key Results: (0.1.1) Knowledge Products (i) (Paper) The Role of the State in the Education Sector in Somalia (ii) (Paper) Customs Revenue Sharing in Somalia (iii) (Paper) Humility on a Journey of State Building: Lessons from FCV Experience (iv) (Paper) Local Governments and Federalism in Somalia (v) (Paper) Public Service Performance and Quality in Somaliland (vi) (Report) PIM Diagnostic (still under review – hence not counted in actuals above) (0.1.2.) Policy Dialogue (i) Financial Governance Committee (FGC): Secretariat supported by MPF. Outputs include Financial Governance Report 2021 (published in November 2021) and 2022 (published in May 2022). (ii) Inter-governmental fiscal relations: RVI dialogue on WB Federalism paper with WB representation. In addition, support to intergovernmental fiscal relations pursued through a senior intergovernmental fiscal advisor (a new contract issued for six months with clear deliverables in FY2022). (iii) Establishment of Pension Technical Working Groups (TWGs) in Somaliland and the PSS. (iv) Country Economic Memorandum Launch: Dialogue with CSOs.   Objective 0.2: Enhanced Risk Management Indicator Unit of 2022 2023 2024 Data Source Measure 0.2.1 Quarterly Reports from Third Party Number Target 4 4 4 Third Party Monitoring Agent Monitoring Agent: Reports indicate Responsibility: MPF Program progress towards enhanced Actual 3 Manager implementation and supervision for portfolio delivery. Description of Key Results: Reports to date in 2022 have addressed emerging risks and risk management, the effectiveness of project implementation arrangements, governments’ wage bill, and human resources management. 22. The indicators in this cross-cutting section do not include baselines as they are focused on outputs with targets that reset annually. 64 Appendices MPF Focus Area: Cross-Cutting22 Objective 0.3: Inclusion of Women and Girls Indicator Unit of 2022 2023 2024 Data Source Measure 0.3.1. Gender gaps reduced as evidenced Percent Target 45 45 45 Project ICRs by percentage of portfolio Responsibility: Gender beneficiaries who are women Actual 53 Platform Team and girls. 0.3.2. Gender considerations reflected in Percent Target 50 60 60 Gender Tag, Monitoring, portfolio design as evidenced by Dashboard percentage of gender tagged Actual 56 Responsibility: Gender projects that include gender Platform Team transformative interventions. MPF Contributions to Country Partnership Framework (CPF) Focus Area 1: Effective, Accountable Government Objective 1.1: Strengthen Institutions and Financing for Social Service Delivery Indicator Unit of Base- 2022 2023 2024 Data Source Measure line 1.1.1. Quarterly Debt Bulletins published Number 4 Target 4 4 4 Ministry of Finance: by Federal Government of Somalia (2021) https://mof.gov.so/ (FGS) contains information on the 1 Actual 2 publications/debt- outstanding stock of general (2020) (Q1 management- government debt; monthly debt- and Q2 reports service projections for 12 months reports Responsibility: ahead; annual principal payment published Macroeconomics, projections (for at least the next five as Trade and years); and key portfolio expected) Investment Global risk indicators. Practice 1.1.2. FGS demonstrates progress on Number NA23 Target 4 8 12 Ministry of Finance key reforms and benchmarks on reports, World Bank public financial management, Actual RCRF II confirmation letters inter-governmental fiscal relations, DLRs: 11; on the achievement and public administration, as RCRF III of results demonstrated by achievement of PBCs: 024 Responsibility: Performance Based Conditions Governance Global verified through the RCRF Practice project (cumulative). 23. The FGS met 13 disbursement-linked results between 2019 and 2021. The cumulative targets for this indicator have been reset to focus on the three years covered in this framework (2022–2024). 24. The details of the achievement of RCRF II DLRs and RCRF III PBCs are included in Appendix 4. continued on next page... 65 Appendices MPF Contributions to Country Partnership Framework (CPF) Focus Area 1: Effective, Accountable Government Objective 1.2: Improve Service Delivery Systems and Financing for Human Capital Indicator Unit of Base- 2022 2023 2024 Data Source Measure line 1.2.1. Women empowerment as evidenced Number 0 Target 0 10,000 25,000 Ministry of by: Number of women and Education, Culture, adolescent girls in project-supported Actual 0 and Higher second chance education, skills Education training, and leadership Responsibility: development programs.25 Education Team 1.2.2. Federal Member States demonstrate Number 1 Target 2 4 6 FGS Ministry of progress on strengthening resource (2021)27 Health records, management systems for service RCRF ISRs delivery and service delivery Actual 528 Responsibility: systems themselves, as Governance Global demonstrated by achievement of the Practice Performance Based Conditions verified through the RCRF project (cumulative).26   1.2.3. Expanded access to health care in Number 886 Target 1,000 1,500 2,000 Somalia as evidenced by: (2021) (i) Number of female health care Actual 88629 workers in place with MPF support. (ii) Number of women and children Total Report- Target 60,000; 80,000; 100,000; visited by female healthcare number; ing 30,000 40,000 50,000 workers. Number delayed30 of girls Actual 65,738 (pregnant women) Description of Key Results: Under the RCRF project, 886 FHWs have been selected and trained, and are providing services in all FMSs and the BRA. The first set of residential training for these FHWs kicked off in early November 2021; the second tranche of training will occur until the end of September 2022. Around 67 FHWs have left the program at different times for various reasons including pastoralist movement or change of professions—these have been, and continue to be, replaced. FHWs and female health supervisors (FHSs) are provided with smartphones, monthly data/calling funds, and relevant training to enable data gathering and transmission in compliance with the MoH instructions dated March 2, 2021, on the use of ICT infrastructure to improve integrated community health systems and services. The proportion of pregnant women referred to health facilities by FHWs in the five FMSs and Benadir in 2022 stands at 21.16 percent, as reported by digital tools. While the program is transitioning from paper-based reporting to digital tools, there are still reports received from the paper system. These paper-based systems indicated that the proportion of women of childbearing age (15–59 years) and children 0–59 months referred to health facilities by FHWs in the five FMSs and Benadir in 2022 stand at 48 percent and 50 percent, respectively. The number of unique pregnant women visited by FHWs totals 65,738 in the five FMS and BRA. Updated data collection systems set to be deployed in October will record the number of children visited by health workers. 25. Dependent on project approval of Women Empowerment for Human Capital Project. 26. Dependent on project approval of RCRF III AF. 27. See PBC 6.1 in Appendix 4. 28. See PBCs 6.1, 6.2, 6.3, 8.1, and 8.2 in Appendix 4. 29. New round of FHW selection is expected in September-November 2022, which will bring the total number of FHWs to slightly over 1,000. 30. The program is moving from a paper-based system to a digital-based collection system primarily through the ODK platforms, where mobile phones will be mainstreamed for data collection, decision making, and capacity building. Integration of such data will be done, wherever needed, with the Health Management Information System (HMIS) and District Health Information System 2 (DHIS 2). The digital reporting has been piloted and the official reporting will start from January 2022. 66 Appendices MPF Contributions to Country Partnership Framework (CPF) Focus Area 2: Enabling Inclusive Private Sector-Led Growth Objective 2.1: Improve the Business Environment and Economic Foundations Indicator Unit of Base- 2022 2023 2024 Data Source Measure line 2.1.2. Trade practices improved as Yes/No No Target Yes – – Ministry of evidenced by: (2021) Commerce and (i) Adoption of trade policy strategy Actual No Industry, FGS and roadmap. Responsibility: (ii) Number of trade diagnostics Number 0 Target 5 5 5 Macroeconomics, provided in support of policy Trade and formulation or implementation. Actual 3 Investment Global Practice 2.1.3. Firms that benefit from reformed Number, 774 Target 1,000 2,000 3,500 Ministry of business registration requirements gender- (2021) (30% (30% (30% Commerce and (number, gender-disaggregated) aggre- women- women- women- Industry; gated led) led) led) SCALED-UP—ISRs Responsibility: Actual 1,156 SCALED-UP Team (of which 7% women) 2.1.4. Number of households that benefit Number 6,430 Target 21,500 21,500 FGS: Ministry of from new stand-alone (2021) Energy and Water solar systems.31 Actual 28,818 Resources (MoEWR); Somaliland: Ministry of Energy and Minerals; Somali Electricity Access Project Responsibility: Energy Global Practice 2.1.5. Access to renewable energy Mega- 0 Target 0.2 enabled, as demonstrated by watts renewable energy generation Actual 0.07 capacity deployed (MW). Description of Key Results: 2.1.2: (i) Strengthening trade institutions. (ii) Trade-related statistical gap analysis. (iii) Policy Note on Somalia’s Road to WTO Accession. Note: In 2.1.4 and 2.1.5: Figures used are for the FGS. 31. Forward looking targets beyond 2023 for electricity access will be added once the next investment project on electricity is finalized and approved. continued on next page... 67 Appendices MPF Contributions to Country Partnership Framework (CPF) Focus Area 2: Enabling Inclusive Private Sector-Led Growth Objective 2.2: Increase Access to Finance and Digital Inclusion Indicator Unit of Base- 2022 2023 2024 Data Source Measure line 2.2.1. The Central Bank of Somalia and Number 0 Target 6 12 Ministry of Federal Ministry of Finance Commerce and demonstrates: Actual 0 Industry and (i) strengthened governance and National financial reporting to enable Communications capitalization; (ii) activation of critical Authority (NCA) institutional systems to enable corresponding banking SCALED-UP ISRs arrangements, and (iii) improved and independent supervisory oversight and capacity verification agent to tackle financial integrity and reports de-risking as evidenced by the achievement of Performance Based Conditions (PBCs) verified through the SCALED-UP project (cumulative). 2.2.2. Value of MSME loans from MSME US$ 3.1 Target 10 15 20 Ministry of financing facility advanced by million, (2021) million million million Commerce and participating financial institutions in % (15%) (20%) (30%) Industry and key economic sectors, National disaggregated to show % to Actual 4.1 Communications women-owned MSMEs million Authority (NCA); (US$ million, %). as of SCALED-UP ISRs June and independent 2022 verification agent (of reports which Responsibility: 18% SCALED-UP Team women- led) 2.2.3. Banks strengthen capacity to Number 0 Target 2 2 0 CBS, Banks, integrate with global financial FSI Secretariat system: Actual 0 Responsibility: (i) Private banks participate in FSI FSI Team program to identify gaps and address the gaps through technical assistance. (ii) Connection of Somali financial Number 0 Target 1 2 2 institutions with development finance institutions / international Actual 0 banks (CBR related intensive dialogue between parties). Description of Key Results: 2.2.1: Independent verification authority (IVA) onboarding in Q1 2023. Therefore no verified results yet. 2.2.3: Dialogue on FSI is ongoing, but no two PFIs selected yet. 32. Dependent on approval of BEoB project on FSI. 68 Appendices MPF Contributions to Country Partnership Framework (CPF) Focus Area 3: Strengthen Resilience Objective 3.1: Build the urban resilience of Somali municipalities33 Indicator Unit of Base- 2022 2023 2024 Data Source Measure line 3.1.1. Number of people with access to Number, 148,800 Target 153,000 163,800 178,800 SURP PCU at the all-season roads within a 500 m disaggre- (2021) Federal Ministry of range in supported towns (number, gated by Actual 148,80034 Public Works disaggregated by municipality). munici- Responsibility: pality Urban Global Practice 3.1.2. Urban roads rehabilitated or Kilo- 12.1 km Target 15 25 45 upgraded (kilometers, cumulative). meters, (2021) cumulative Actual 12.135 3.1.3. Beneficiaries satisfied that Percent NA Target NA 60% 70% infrastructure met their needs (number, % female, % IDPs). Actual NA Description of Key Results: The targets aggregate the results from SURP I and SURP II. 33. Urban resilience indicators will be added as the portfolio expands beyond road infrastructure. 34. The next batch of civil works projects has begun under SURP II. Total beneficiaries will not be updated until the projects are completed and handed over. 35. Several roads are under construction, but the total kilometers of rehabilitated/upgraded roads will not be updated until the projects are completed and handed over. Key: Achieved Partially achieved Not achieved 69 Appendices APPENDIX 2 Systematic Operations Risk-Rating Tool (SORT): Project Name and ID ISR Sequence Political and Macro- Sector No Governance economic Strategies and Policies Somalia Capacity Injection (P149971) 11 Substantial High Substantial Second Public Financial Manage- 10 High High Moderate ment Capacity Strengthening Project (P151492) Somalia Recurrent Cost and Reform 11 High High Moderate Financing Project: Phase II (P154875) Somaliland Civil Service Strengthening 10 Substantial Substantial Moderate Project (P155123) Somali Electricity Access Project 7 Substantial Substantial Moderate (P165497) Somalia Capacity Advancement, Liveli- 7 High Substantial Moderate hoods and Entrepreneurship, through Digital Uplift Project (P168115) Somalia Urban Resilience 6 High High Moderate Project II (P170922) Somaliland Civil Service Strengthening NA (declared effective on March 25, 2022; Project II (P174875) no ISRs yet) 70 Appendices Overview of Ratings for MPF Investment Projects Technical Institutional Fiduciary Environment Stakeholders Other Overall Design of Capacity for and Social Project or Implementation Program and Sustainability Moderate Substantial Substantial Moderate Moderate High Substantial Substantial Substantial Substantial Moderate Substantial High Substantial Substantial Substantial High Low Substantial High High Substantial Substantial Substantial Moderate Moderate High Substantial Moderate Substantial Substantial Substantial Moderate Substantial Substantial Substantial Substantial High Moderate Substantial -- Substantial Substantial High High High High High High 71 Appendices APPENDIX 3 Status of HIPC Completion Point Triggers HIPC Completion Point Trigger Progress Poverty reduction strategy implementation Satisfactory implementation for at least one year Progress has been made across the four NDP9 pillars, of Somalia’s full poverty reduction strategy, as including social, economic, security, and governance evidenced by an Annual Progress Report on the policies. However, the COVID-19 pandemic and lower-than- implementation of the poverty reduction strategy expected funding have slowed its implementation in 2021. submitted by the government to IDA and the IMF. The Annual Progress Report evaluating the implementation of the National Development Plan in 2020 is expected to be completed in 2022H1. Macroeconomic stability Maintain macroeconomic stability as evidenced by The first review of the ECF-supported program was satisfactory implementation of the three-year ECF- completed on November 18, 2020. The second and third supported program. reviews are expected to be completed by June 2022. Public financial and expenditure management Publish at least two years of the audited financial The Office of the Auditor General published the 2019 and accounts of the FGS.  2020 FGS financial accounts. Issue regulations to implement the Public The PFM regulations—including chapters on debt, public Financial Management Act’s provisions on debt, investments, and natural resource revenue management— public investment, and natural resource revenue have been prepared by the MOF and were approved by the management. Cabinet in May 2022. Domestic revenue mobilization Adopt and apply a single import duty tariff The FGS and FMSs reached agreement on the single schedule at all ports in the Federal Republic of tariff schedule, which will be submitted to Parliament Somalia (to also foster greater trade integration). for approval. Supporting customs regulations are under preparation. The Customs Automated System (CAS) has been piloted first in Mogadishu port and airport before rolling out to Bosaso, Garowe, and Kismayo. Governance, anticorruption, and natural resource management Enact the Extractive Industry Income Tax (EIIT) Cabinet approved the EIIT Bill in December 2020. The Law.  Bill has been harmonized with the Production Sharing Agreement (PSA) to ensure consistency. The Bill will be submitted to Parliament for approval. Ratify the ‘United Nations Convention Against The UNCAC was ratified by the Somali Parliament and Corruption’ (UNCAC). assented by the President in December 2020. Debt management Publish at least four consecutive quarterly The Ministry of Finance is making progress to improve debt reports outlining the outstanding stock of general reporting. Quarterly debt bulletins were published covering government debt; monthly debt-service projections Q4 2020; Q1, Q2, Q3, and Q4 of 2021; and Q1 of 2022, for 12 months ahead; annual principal payment with information on the outstanding stock and composition projections (for at least the next five years); and of debt liabilities and financial assets and, where they exist, key portfolio risk indicators (including proportion of loan guarantees and other contingent liabilities, including debt falling due in the next 12 months; proportion their currency denomination, maturity, and interest rate of variable rate debt; and projected debt service- structure. to-revenues and debt service-to-exports for the next five years). 72 Appendices HIPC Completion Point Trigger Progress Social sectors Establish a national unified social registry (USR) The authorities are establishing a USR with support from as a functional platform that supports registration the World Bank, the World Food Program (WFP) and and determination of potential eligibility for social UNICEF. The USR design and development of the platform programs. and infrastructure are progressing well. However, progress is needed on the development of the data protection and data privacy Law and operational guidelines. FGS and FMS Ministers of Education adopt an On July 14, 2021, the FGS and FMS MoEs including agreement defining their respective roles and Puntland finalized and officially signed the revised draft responsibilities on curriculum and examinations. education cooperation MoU at the intergovernmental meeting held in Garowe. A permanent intergovernmental forum for education has been formalized. Key agreements reached include the formation of national examination, certification, and curriculum boards. An interim committee to develop the criteria for selection of the board members was also established. FGS and FMS Ministers of Health adopt a joint The Somalia Health Sector Strategic Plan for 2022–2026 national health sector strategy. was finalized. FGS and FMS ministers have agreed on a framework for a joint national health strategy. Growth/structural Enact the Electricity Act and issue supporting The draft Somalia Electricity Bill was subject to regulations to facilitate private sector investment in consultations and was endorsed by Cabinet and submitted the energy sector. to the Parliament in December 2020. The bill will be prioritized by the 11th Parliament in its first readings. Issue Company Act implementing regulations The regulations to the Company Act were issued in January on minority shareholder protection to encourage 2021. A second set of Regulations to the Company Act private sector investment. were issued in May 2022 specifically covering the issue of minority shareholder protection. Statistical capacity Publish at least two editions of the Somalia Annual The Facts and Figures of Somalia has been published for Fact Book. 2018, 2019, and 2020.. 73 Appendices APPENDIX 4 Status of Reform Benchmarks/ Disbursement-Linked Indicators (DLIs) (A) RCRF II Disbursement Status As of June 30, 2022 Disbursement-Linked Indicators Status Disbursement DLI 1: Strengthen customs administration as per the customs reform action plan DLR 1.1. Customs modernization roadmap and action plan tabled, Met, disbursed. SDR 1,025,000 discussed and adopted at intergovernmental technical committee, (US$1,410,994) including agreement on common goods classification (by August 2019). DLR 1.2. Implementation of interim IT system at Mogadishu, Bosaso Canceled. SDR 1,025,000 and Kismayo ports, including common goods classification, customs practices and procedures and valuation of goods (by August 2020). DLR 1.3. Functional specifications for the new customs IT system Met, disbursed on SDR 1,023,850 developed and approved by FGS MoF (by February 2021). June 16, 2021. (US$1,474,026) DLI 2: Strengthen tax administration systems and staffing DLR 2.1. TIN and TCC mandatory when bidding for government Met, disbursed. SDR 1,025,000 contracts and valid TIN required to have invoice paid (by March (US$1,410,994) 2019). DLR 2.2. Review existing business processes ‘as–is’ and new Met, disbursed. SDR 1,025,000 business processes developed and approved by FGS for the following revenue streams (sales tax, excise duty, road tax, stamp duty, registration tax (fees and levies) (by February 2020). DLR 2.3. Targeted automation for collection of sales tax, excise duty, Canceled. SDR 1,025,000 road tax, stamp duty, and registration tax deployed (by August 2020). DLI 3: Strengthen cash management and treasury single account (TSA) DLR 3.1. Somalia financial management information system (SFMIS) Met, disbursed. SDR 1,025,000 incorporates: (a) End-of-day balances of all TSA accounts; and (b) (US$1,410,994) monthly balances of all MDA accounts held at the CBS (by March 2019). DLR 3.2. SFMIS incorporates: (a) end-of-day reconciled balances Achieved, to be SDR 1,025,000 of all government accounts for revenue and expenditure; and (b) all disbursed by August outstanding commitments made (by February 2020). 31, 2022. DLR 3.3. SFMIS incorporates cash forecasting model, to inform Not met, SDR 1,025,000 management about commitments, available balances and expected achievement revenues with regular monthly management reports produced by the is expected in Accountant General through SFMIS (by February 2021). August 2022, but disbursements will not be made. 74 Appendices DLI 4: Strengthen payment process for operational expenditures DLR 4.1. Reduce cash advances to MDAs for nonsalary recurrent Met, disbursed. SDR 1,025,000 costs from 56.4 percent baseline at end-March 2018 to 26.4 percent (US$1,410,994) [value-based] (by March 2019). DLR 4.2. Reduce cash advances to MDAs for nonsalary recurrent Met, disbursed. SDR 1,025,000 costs from 56.4 percent baseline at end-March 2018 to 16.4 percent (US$1,409,918) [value-based] (by February 2020). DLR 4.3. All government payments for salaries, transfers and capital Met, disbursed on SDR 1,025,000 expenditures to be executed as payments to Bank accounts directly June 16, 2022. (US$1,475,590) to vendors, with the exception of: petty cash, travel advances, security sector, and contingency (per Appropriation Act) (by February 2021). DLI 5: Strengthen intergovernmental fiscal policy framework DLR 5.1. Policy paper outlining policy framework for Met, disbursed. SDR 1,025,000 intergovernmental fiscal transfers agreed at Finance Ministers Fiscal (US$1,409,918) Forum covering: Budget timetable, reporting, accountability and disbursement conditions (by March 2019). DLR 5.2. Draft Policy paper including: (a) principles to guide FGS Met, disbursed on SDR 1,025,000 transfer allocations to FMS/BRA; (b) comparative analysis, reflecting March 5, 2021. (US$1,464,581) regional context; and (c) long-term views, tabled at Finance Ministers Fiscal Forum (by August 2020). DLR 5.3. Fiscal transfer allocations in draft 2021 FGS budget reflect Met, disbursed. SDR 1,025,000 policy paper principles (by August 2021). DLI 6: Strengthen FGS transfers to FMS DLR 6.1. FGS fiscal transfers execution rate to FMS equal to or Missed. 0 greater than the outturn rate for domestic revenues (Year 1) (by August 2019). DLR 6.2. FGS fiscal transfers execution rate to FMS equal to or Met, disbursed on SDR 1,025,000 greater than the outturn rate for domestic revenues (Year 2) (by March 5, 2021. (US$1,464,581) August 2020). DLR 6.3. FGS fiscal transfers execution rate to FMS equal to or Missed. 0 greater than the outturn rate for domestic revenues (Year 3) (by August 2021). DLI 7: Strengthen teacher proficiency testing DLR 7.1. Teacher proficiency test piloted in at least one eligible FMS/ Met, disbursed. SDR 1,025,000 BRA, establishing minimum competency level of teachers (Year 1) (US$1,410,994) (by August 2019). DLR 7.2. Proficiency testing of teachers conducted in at least two Met, disbursed on SDR 1,025,000 eligible FMS/BRA as an annual exercise, establishing minimum March 5, 2021. (US$1,464,581) competency level of teachers (Year 2) (by August 2020). DLR 7.3. Proficiency testing of teachers conducted in at least three Met, disbursed on SDR 1,000,000 eligible FMS/BRA as an annual exercise, establishing minimum June 16, 2021. (US$1,439,690) competency level of teachers (Year 3) (by August 2021). 75 Appendices Disbursement-Linked Indicators added in March 2022 DLI 8: Reforming civil service legislation DLR 8.1: The Cabinet has endorsed the First Set of Administrative Met, disbursed US$2,000,000 Regulations for the Civil Service Bill. DLR 8.2.1: The Federal Parliament has enacted a civil service law. Not met due US$1,000,000 to delays in Parliamentary elections DLR 8.2.2: The Cabinet has endorsed the Second Set of Met, disbursed on US$500,000 Administrative Regulations for the Civil Service Bill. November 13, 2021. DLR 8.3.1: The MoLSA has issued two quarterly reports covering Not met due to US$500,000 all Non-Security MDAs on status and applicability of the new Civil delays in DLR 8.2.1. Service Law and its Administrative Regulations. DLR 8.3.2: The Cabinet has endorsed the Organizational Ordinance. Not met due to US$500,000 delays in the new Cabinet formation. DLI 9: Monitoring staff attendance with biometrics DLR 9.1: One Non-Security Ministry has implemented biometric Met, disbursed. US$500,000 attendance monitoring systems. DLR 9.2.1: Fifteen Non-Security Ministries have implemented Not met, included in US$1,000,000 biometric attendance monitoring systems (implementation will RCRF III AF. include links with the payroll, performance, and disciplinary systems). DLR 9.2.2: The NCSC has adopted an action plan based on the Not met, included in US$500,000 lessons learned during the year for implementation of the system and RCRF III AF. its integration with the payroll, performance, and disciplinary system across all Non-Security Ministries of the Recipient. DLI 10: Promoting opportunities for women in the Recipient’s civil service and leadership DLR 10.1: The NCSC has issued guidelines: (a) documenting the Met, disbursed. US$1,000,000 number of women in various grade levels in the Recipient’s civil service; (b) detailing measures to attain 30 percent ratio of women in senior leadership positions; and (c) prescribing annual progress reporting requirements on gender representation in the Recipient’s civil service. DLR 10.2: The NCSC has published an annual report covering, inter Achieved, to be US$500,000 alia: (a) the number of women in various grade levels, including disbursed by August senior leadership positions, in the Recipient’s civil service; (b) the 31, 2022. progress achieved as per the measures prescribed and goals set forth in NCSC gender-related guidelines; and (c) an action plan for the next reporting period to eventually achieve the 30 percent ratio of women in senior leadership positions by December 2024. DLI 11: Reforming civil service pay and grading DLR 11.1: The Cabinet has approved a pay and grade reform as per Not met, included in US$500,000 the technical analysis carried out under the Project. RCRF III AF. DLR 11.2: The Cabinet has approved a plan for transitioning Not met, included in US$500,000 Capacity Injection Modality staff and other donor-financed positions RCRF III AF. into the new pay and grading system. 76 Appendices DLI 12: Reforming pensions policy and administration DLR 12.1: The Cabinet has (a) approved a pension policy; and (b) Met, disbursed. US$2,000,000 submitted a draft pension law to the Parliament. DLR 12.2: The Recipient has adopted pension regulations. Not met, included in US$1,000,000 RCRF III AF. DLR 12.3.1: The Recipient has retired, granted pensions, and started Not met, included in US$500,000 paying them as of January 1, 2022, to all civil servants at, or above, RCRF III AF. the mandatory pension age. DLR 12.3.2: The MoF has established a pension fund department. Not met, included in US$500,000 RCRF III AF. DLI 13: Improving wage bill management and transparency DLR 13.1: The Cabinet has approved an action plan to improve the Not met, included in US$1,500,000 transparency and management of a reduced nonformal wage bill. RCRF III AF. DLI 14: Harmonizing CoA and reliable and timely consolidated fiscal reports DLR 14.1: The MoF has: (a) issued a policy prescribing: (i) the Met, disbursed. US$1,000,000 harmonization of the budget codes and chart of accounts; (ii) the standardization of reporting formats, collection and consolidation of budget data; and (iii) generation of financial/budget reports; as well as (b) established a dedicated financial reporting unit to implement the foregoing policy. DLR 14.2: The MoF’s newly established financial reporting unit Met, disbursed. US$1,000,000 has developed and adopted: (a) a harmonized/unified budget classification/chart of accounts; (b) control mechanisms to manage the expansion of the unified chart of accounts in line with the requirements of the MDAs at federal, state and local government- levels; and (c) standard reporting formats to collect and consolidate budget results from the SFMIS platforms and/or other financial management information systems at federal and state levels. DLR 14.3.1: The Recipient has (a) prepared the budget for Fiscal Not met, included in US$250,000 Year 2022 using the new unified chart of accounts (“CoA”); and (b) RCRF III AF. has issued instructions for the use of the new CoA in the SFMIS as well as other financial management information platforms at federal and state levels for the planned budget execution of Fiscal Year 2022. DLR 14.3.2: The MoF has published monthly fiscal reports using Not met, included in US$250,000 the new CoA and reporting formats in the financial management RCRF III AF. information system platforms of the Recipient and FMSs starting from January 1, 2022. 77 Appendices DLI 15: Enhancing health service delivery systems DLR 15.1: The MoH has issued instructions to use the mobile phone Met, disbursed. US$1,000,000 infrastructure for improved delivery and performance management of the Marwo Caafimaad Program. DLR 15.2: The MoH has piloted data gathering from, and training Met, disbursed. US$1,000,000 of, female health workers (“FHW”) and female health supervisors (“FHS”) in at least two (2) FMSs or one FMS and BRA. DLR 15.3.1: The MoH and the FMoHs have recruited, trained, and Achieved, to be US$250,000 deployed at least 700 FHW/FHS. disbursed by August 31, 2022. DLR 15.3.2: (a) At least 300 FHW/FHS have reported their activities, Achieved, to be US$250,000 on at least fortnightly basis for the last one month, using mobiles/ disbursed by August tablets; and (b) an additional 300 FHW/FHS have reported their 31, 2022. activity on a daily basis for the last one month using mobiles/tablets. DLR 15.3.3: The MoH has reached out to at least 500 pregnant Achieved, to be US$250,000 women using mobile phones. disbursed by August 31, 2022. DLR 15.3.4: The MoH has: (a) conducted a stocktaking exercise on Achieved, to be US$250,000 the lessons learned from the roll-out of the ICT-based data gathering, disbursed by August beneficiary engagement and training of FHW/FHS; and (b) approved 31, 2022. an action plan for calendar year 2022 to further strengthen and broaden the ICT-based data gathering, beneficiary engagement and training of FHW and FHS. Key: DLR either cannot be achieved, or the delay in achievement is impacting negatively on achievement of future results under the DLI. DLR is likely to be achieved, but with delay. DLR on track for being achieved on time. DLR has been substantively achieved (subject to verification). Note: DLI = Disbursement-Linked Indicator; DLR = Disbursement-Linked Result; PBC: Performance-Based Conditions. 78 Appendices (B) RCRF III Performance-Based Conditions’ Disbursement Status As of June 30, 2022 Performance-Based Conditions Timeline/Status Amount PBC 1: Strengthen customs administration as per the customs reform action plan US$1,250,000 PBC 1.1: The MoF has developed and operationalized the new IT By end of June 2022 US$1,000,000 system, as well as its manuals of procedures. (expected). PBC 1.2: The MoF has completed a simplified functional review of By end of June US$250,000 FGS customs to better allocate human resources in customs. 2023. PBC 2: Strengthen payment process for operational expenditures US$1,250,000 PBC 2.1: The MoF has: (a) completed a business process review for By end of November US$1,000,000 FGS’ payment; and (b) prepared/issued a business process review 2022. report including the processing of fiscal transfers and education and health sector payments. PBC 2.2: The MoF has approved comprehensive procedures aligned By end of November US$250,000 with the business process review for following areas: (i) planning and 2023. budgeting; (ii) internal controls; and (iii) accounting procedures. PBC 3: Strengthen intergovernmental fiscal policy framework US$1,250,000 PBC 3.1: The FGS’ FY 2022 budget provides for appropriations for By end of June 2022 US$1,000,000 FGS’ fiscal transfers to FMS/BRA as per an intergovernmentally (moved to June agreed formula. 2023). PBC 3.2: The FGS’ FY 2023 budget provides for appropriations for By end of June US$250,000 FGS’ fiscal transfers to FMS/BRA as per an inter-governmentally 2023. agreed formula. PBC 4: Strengthen FGS transfers to FMS US$1,250,000 PBC 4.1: The FGS’ fiscal transfers execution rate for the first half of By end of November US$1,000,000 FY 2022 to FMS/BRA is equal to, or greater than, the outturn rate for 2022. FGS’ domestic revenues. PBC 4.2: The FGS’ fiscal transfers execution rate for the first half of By end of November US$250,000 FY 2023 to FMS/BRA is equal to, or greater than, the outturn rate for 2023. FGS’ domestic revenues. PBC 5: Strengthen public administration US$1,250,000 PBC 5.1: The FGS has: (a) enacted a pension law; (b) adopted By end of June 2022 US$1,000,000 regulations on pensions for civil servants (including those guiding (moved to November collection); and (c) established a pension secretariat with the 2022). participation of tall relevant MDAs. PBC 5.2: The FGS has established, staffed, and operationalized a By end of November US$250,000 pension unit within six months from the commencement of pension 2023. collections. 79 Appendices PBC 6: Strengthen FMS resource management systems for service delivery US$5,580,000 PBC 6.1: The FMSs have: (a) signed Service Delivery Transfer Met, disbursed. US$2,500,000 Agreements with the FGS, including costed COVID-19 measures, for an aggregate amount equal to the Allocated Amount of this PBC equivalent; and (b) approved budgetary appropriations for FY 2020 allocating a net budgetary increase for their respective MoH equal to the amount of the respective Service Delivery Transfer Agreements. PBC 6.2: The FMSs have: (a) signed with the FGS an updated Met, disbursed. US$600,000 Service Delivery Transfer Agreements (2021); and (b) approved budgetary appropriations for FY 2021 allocating a net aggregate budgetary increase for education and health sectors equal to the aggregated Allocated Amounts for PBCs 6.2, 6.3, 8.1, and 8.2. PBC 6.3: The FMSs have: (a) issued their respective implementation Met, disbursed. US$600,000 and financial reports on the use of federal (service) transfers covering FY 2020 and the first half of FY 2021 in line with provisions Service Delivery Transfer Agreements demonstrating release of funds to MoHs and MoEs; and (b) submitted the same to the MoF. PBC 6.4: The FMSs have: (a) signed with the FGS an updated By end of June US$750,000 Service Delivery Transfer Agreements (2022); and (b) approved 2022. budgetary appropriations for FY 2022 allocating a net aggregate budgetary increase for education and health sectors equal to the aggregated Allocated Amounts for PBCs 6.4, 6.5, and 7.2. PBC 6.5: The FMSs have: (a) issued their respective implementation By end of November US$750,000 and financial reports on the use of federal (service) transfers 2022. covering FY 2021 and the first half of FY 2022 in line with provisions Service Delivery Transfer Agreements demonstrating release of funds to MoHs and MoEs; and (b) submitted the same to the MoF. PBC 6.6: The FMS have: (a) signed with FGS an updated Service By end of June US$380,000 Delivery Transfer Agreements (2023); and 2023. (b) approved budgetary appropriations for FY 2023 allocating a net aggregate budgetary increase for education and health sectors equal to the aggregated Allocated Amounts for PBCs 6.6, 7.4, and 8.5. PBC 7: Strengthen education service delivery US$3,080,000 PBC 7.1: Each FMS has adopted a Performance-Based School By end of November US$600,000 Grants policy. 2021. Canceled by RCRF AF. PBC 7.2: Each FMS has: (a) maintained a Performance- Based Canceled by end of US$950,000 School Grants policy for the financing of recurrent costs; and (b) June 2022. approved aggregate FY 2022 budgetary appropriations for MoEs’ Performance-Based School Grants equal to half the aggregated Allocated Amounts for PBCs 6.4, 6.5, 7.2, 7.3, 8.3, and 8.4. PBC 7.3: All payroll supported schools in the FMS with signed By end of November US$950,000 Performance-Based School Grants Agreements have received 2022. annual Performance-Based School Grants in a timely manner, as per the signed agreements. PBC 7.4: Each FMS has (a) maintained a Performance-Based By end of June US$580,000 School Grant policy for the financing of recurrent costs; and (b) 2023. . approved aggregate FY 2023 budgetary appropriations for MoEs’ Performance-Based School Grants equal to half the aggregated Allocated Amounts for PBCs 6.6, 7.4, and 8.5. 80 Appendices PBC 8: Strengthen health service delivery US$3,080,000 PBC 8.1: The FMSs have: (a) adopted annual community health Met, disbursed. US$600,000 service delivery plans, including infectious disease measures for FY 2021; and (b) approved MoHs’ FY 2021 budgetary appropriations for community health service delivery for an amount equal to half the aggregated Allocated Amounts for PBCs 6.2, 6.3, 8.1, and 8.2. PBC 8.2: The FMSs have executed the community health service Met, disbursed. US$600,000 delivery plans for FY 2021 in a timely manner, as per the signed Service Delivery Transfer Agreements. PBC 8.3: The FMSs have: (a) adopted annual community health By end of June US$750,000 service delivery plans, including infectious disease measures for FY 2022. 2022; and (b) approved MoHs’ FY 2022 budgetary appropriations for community health service delivery for an amount equal to half the aggregated Allocated Amounts for PBCs 6.4, 6.5, 7.2, 7.3, 8.3, and 8.4. PBC 8.4: The FMSs have executed the community health service By end of November US$750,000 delivery plans for FY 2022 in a timely manner, as per the signed 2022. Service Deliver Transfer Agreements. PBC 8.5: The FMSs have (a) adopted annual community health By end of June US$380,000 service delivery plans, including infectious disease measures for FY 2023. 2023; and (b) approved MoHs’ FY 2023 budgetary appropriations for community health service delivery for an amount equal to half the aggregated Allocated Amounts for PBCs 6.6,s 7.4, and 8.5. Key: DLR either cannot be achieved, or the delay in achievement is impacting negatively on achievement of future results under the DLI. DLR is likely to be achieved, but with delay. DLR on track for being achieved on time. DLR has been substantively achieved (subject to verification). Note: DLI = Disbursement-Linked Indicator; DLR = Disbursement-Linked Result; PBC: Performance-Based Conditions. 81 Appendices (C) Matrix of SCALED-UP Performance-Based Conditions36 Performance-Based Conditions (PBCs) Timeline/Status PBC 1: Strengthened governance and financial reporting of the CBS to enable capitalization PBC 1.1: June 2021. (a) The CBS Board has (i) established an Audit Committee of the CBS Board; and (ii) formulated a plan, with the external auditors, setting out actions to resolve the recurring audit qualification for FY19 and beyond. (b) The CBS Governor has approved, and caused to be audited and published, the FY19 financial statements on the CBS website. PBC 1.2: December 2021. (a) The CBS Board has: (i) resolved outstanding recommendations (those contributing to financial statements qualification) and completed all outstanding external audits from prior years; and (ii) established quarterly reporting to the Audit Committee on the execution of its audit plan, status of recommendations (including external audit recommendations), and key activities. (b) The CBS Governor has approved, and caused to be audited and published, the FY20 financial statements on the CBS website. PBC 1.3: June 2022. (a) The CBS Board has approved, and the recipient’s Cabinet has endorsed, the draft CBS Act Amendment Bill to (i) remove the requirement for the MoF to issue directives to the CBS in exceptional circumstances; (ii) specify the CBS’ authorized capital share, (iii) include provisions on the authority and functions of the Audit Committee; and (iv) strengthen the provisions on external and internal audit procedures. (b) The CBS Board, FGS MoF, and the recipient’s Cabinet have approved a credible CIP. (c) The CBS Governor has approved, and caused to be audited and published, the FY21 financial statements on the CBS website. PBC 1.4: The Minister of Finance has submitted the draft CBS Act Amendment Bill to the December 2022. Parliament for approval. PBC 1.5: June 2023. (a) The CBS Amendment Act has been published in the Government Gazette and enacted into law. (b) The FGS MoF has made an initial capitalization payment (nominal capital) to the CBS (in line with the approved CIP). PBC 2: Activation of critical institutional systems within the CBS to enable corresponding banking arrangements PBC 2.1: The CBS ICT Directorate in consultation with user departments has issued a report, June 2021. approved by the CBS Governor, setting out the proof of concept, implementation roadmap, and timelines outlining all the scoped CBS systems (modules) earmarked for implementation at the FGS and FMS. PBC 2.2: The CBS ICT Directorate, in consultation with user departments, has implemented December 2021. 50 percent of the validated scope and the corresponding system functionalities (modules) have been fully activated and operationalized. 36. The timeframes indicated in the table are indicative and the achievement of Performance-Based Conditions is not time-bound. As an independent verification agent was not onboarded until the end of FY22, and progress has not yet been verified against these indicators. As of now, verified results are not available. 82 Appendices PBC 2.3: June 2022. (a) The CBS ICT Directorate, in consultation with user departments, has (i) implemented 75 percent of the validated scope and the corresponding system functionalities (modules) have been fully activated and operationalized; and (ii) extended CBS operations to two out of the five FMSs. (b) The CBS Governor has (i) established two additional active corresponding arrangements for the CBS; and (ii) extended CBS operations to three out of the five FMSs. PBC 2.4: December 2022. (a) The CBS ICT Directorate has (i) implemented 100 percent of the validated scope, with the corresponding system functionalities (modules) having been fully activated and operationalized; and (ii) extended CBS operations to more than 50 percent of the FMSs. (b) The CBS Governor has established three additional active corresponding banking arrangements and CBS operations are sustained across four out of the five FMSs. PBC 3: Improved CBS supervisory oversight, capacity building, and staff reorganization into a more effective structure to tackle financial integrity and de-risking PBC 3.1: The CBS Board has approved the staffing reorganization scheme. June 2021. PBC 3.2: December 2021. (a) The CBS has initiated its staffing reorganization scheme in accordance with HR guidelines. (b) The CBS Board has approved and operationalized the e-KYC draft regulations and risk- based supervision (RBS) methodology of ML/FT risks in FIs. PBC 3.3: June 2022. (a) The CBS has fully implemented the staffing reorganization scheme and 50 percent of the CBS staff positions outlined in the staffing reorganization scheme have been recruited on merit and, in accordance with HR guidelines, are trained and actively providing services. (b) The CBS ICT Directorate, in consultation with user departments and PFIs, has operationalized CVS enabling e-KYC protocols and two licensed FIs have been connected by the CBS. (c) The CBS senior management has approved examination reports completed by staff for 40 percent of the FIs examined using RBS approaches covering ML/FT risks, matters requiring immediate action have been communicated to FIs for implementation, and the CBS has published in the Financial Stability Report the nonconfidential aggregate information on the nature and number of matters requiring immediate action issued to all FIs. PBC 3.4: December 2022. (a) 100 percent of all the CBS staff positions outlined in the staffing reorganization scheme have been recruited on merit in accordance with HR guidelines, trained, and actively providing services. (b) The CBS ICT Directorate, in consultation with user departments and PFIs, has verified 50 percent of customers with transaction accounts using CVS/e-KYC. (c) The CBS senior management has approved examination reports completed by staff for 50 percent of the FIs examined using RBS approaches covering ML/FT risks, and matters requiring immediate action have been communicated to FIs for implementation. Note: The CBS staffing reorganization scheme including the CIP will have due regard to rightsizing of personnel and nonpersonnel expenses to ensure consolidation of the CBS fiscal position and sustainability of reorganization interven- tions. 83 84