Document of The World Bank Group FOR OFFICIAL USE ONLY Report No. 176049 INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY PERFORMANCE AND LEARNING REVIEW OF THE COUNTRY PARTNERSHIP FRAMEWORK FOR THE FEDERAL REPUBLIC OF SOMALIA FOR THE PERIOD FY19–FY22 September 23, 2022 Country Management Unit, AFCE2 Eastern and Southern Africa Region The International Finance Corporation Africa Region Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authori- zation. The date of the last Country Partnership Framework was August 29, 2018. CURRENCY EQUIVALENTS (Currency Unit: Somali Shilling (SSH)) (US$1.00 = SOS 568.50 as of July 31, 2022) SOMALIA GOVERNMENT FISCAL YEAR January 1 – December 31 ABBREVIATIONS AFDB African Development Bank HIPC Heavily Indebted Poor Countries AMISOM African Union Mission in Somalia Initiative AML/CFT anti-money laundering/combating HLO High-Level Outcome the financing of terrorism HoA Horn of Africa ASA Advisory Services and Analytics HoAI Horn of Africa Initiative ATMIS African Union Transition Mission in ICT information and communications Somalia technology CEM Country Economic Memorandum ID identification CIP Capacity Injection Project IDA International Development Associ- CMU Country Management Unit ation CPF Country Partnership Framework IDP internally displaced person DO Development Progress IFC International Finance Corporation DPF Development Policy Financing IP Implementation Progress DPO Development Policy Operation IPF Investment Project Financing EAFS External Assistance Fiduciary Sec- ISR Implementation Status Report tion IT information technology ECF Extended Credit Facility JET Jobs and Economic Transformation EFF Extended Fund Facility M&E monitoring and evaluation EIIT Extractives Industries Income Tax MAF Mutual Accountability Framework ERF Early Response Financing MDAS ministries, departments, and agen- ESF Environmental and Social Frame- cies work MIGA Multilateral Investment Guarantee EU European Union Agency FAM Famine Action Mechanism MPF Multi-Partner Fund FCV fragility, conflict, and violence MSMEs micro, small, and medium-size en- FDI foreign direct investment terprises FGS Federal Government of Somalia NDP9 Ninth National Development Plan FHW female health worker ODA Official Development Assistance FIDEP Financial Institutions Development PACGs Pre-Arrears Clearance Grants Project PBA Performance-Based Allocation FMFF Finance Ministers Fiscal Forum PBC Performance-Based Condition FMS Federal Member State(s) PER Public Expenditure Review FSI Financial Sector Initiative PFM public financial management FY fiscal year PIU Project Implementation Unit GEMS Geo-Enabling initiative for Moni- PLR Performance and Learning Review toring and Supervision PPP public-private partnership GDP Gross Domestic Product PSDS Private Sector Development in So- GRID Green, Resilient, and Inclusive De- malia velopment PV photovoltaic GRM Grievance Redress Mechanism RBF Results-Based Financing RBG results-based grant(s) RCRF Recurrent Cost and Reform Financ- ing RETF Recipient-Executed Trust Fund RMF Risk Management Framework RRF Recovery and Resilience Frame- work SCALED-UP Somalia Capacity Enhancement Livelihoods and Entrepreneurship Digital Uplift Program SCD Systematic Country Diagnostic SCORE Somalia Core Economic Institutions and Opportunities Program SCRP Somalia Crisis Recovery Project SDG Sustainable Development Goal SDR Special Drawing Rights SHS solar home system(s) SMEs small and medium-size enterprises SNA Somalia’s National Army SRM Security Risk Management SURP Somalia Urban Resilience Project TA Technical Assistance TAA Turnaround Allocation TAR Turnaround Regime TPM third-party monitoring UNOPS UN Office for Project Support UN United Nations WBG World Bank Group WHO World Health Organization IBRD IFC MIGA Vice President: Victoria Kwakwa Sergio Pimenta Ethiopis Tafara Country Director: Keith Hansen Jumoke Jagun-Dokunmu Merli Baroudi Task Team Leader: Matthias Mayr Mohamed Mukhtar Qamar Jessica Charles Wade iii PERFORMANCE AND LEARNING REVIEW OF THE COUNTRY PARTNERSHIP FRAMEWORK FOR THE FEDERAL REPUBLIC OF SOMALIA FOR THE PERIOD FY19–FY22 Table of Contents I. INTRODUCTION ............................................................................................................................................................. 1 II. MAIN CHANGES IN COUNTRY CONTEXT ........................................................................................................................ 2 III. SUMMARY OF PROGRAM IMPLEMENTATION ............................................................................................................... 6 IV. EMERGING LESSONS .................................................................................................................................................... 10 V. ADJUSTMENTS TO THE CPF PROGRAM ........................................................................................................................ 11 VI. RISKS ........................................................................................................................................................................... 15 Annex 1. Revised Results Matrix for Somalia FY19–23 CPF (for Evaluation in the Completion and Learning Review) ........... 18 Annex 2. Changes to Original FY19–22 Country Partnership Framework Results Matrix ...................................................... 26 Annex 3. Assessment of Original FY19–22 Country Partnership Framework Results Matrix ................................................. 34 Annex 4. HIPC Completion Point Triggers for Somalia ......................................................................................................... 49 Annex 5. Planned versus Actual Lending to Somalia, FY19–22 ............................................................................................. 50 Annex 6. Selected Economic and Financial Indicators for Somalia, 2018 –23 ....................................................................... 52 Annex 7. Transition from Multi-Partner Fund to IDA Lending in Somalia ............................................................................. 53 Annex 8. Planned versus Actual Advisory Services and Analytics Provided to Somalia, FY19–22 ........................................ 54 Annex 9. Mapping of Revised Country Partnership Framework to Somal ia’s Ninth National Development Plan and the Sustainable Development Goals .......................................................................................................................................... 56 Annex 10. The World Bank Group’s Active Portfolio in Somalia ........................................................................................... 57 Annex 11. Geographic Allocation of World Bank Lending Projects in Somalia ...................................................................... 59 Annex 12. IFC Portfolio in Somalia ...................................................................................................................................... 60 Tables Table 1 Proposed lending and key Advisory Services and Analytics for FY23 .............................................................................. 13 Table 2 Risk assessment for CPF outcomes .................................................................................................................................. 15 Table A1.1 Revised results matrix for the Somalia FY19–23 CPF ................................................................................................. 18 Table A2.1 Matrix of changes to the original FY19 –22 CPF results matrix................................................................................... 26 Table 4A.1 HIPC Completion Point triggers agreed to with the Somali authorities ..................................................................... 49 Table A6.1 Planned versus actual lending to Somalia, FY19 –21 .................................................................................................. 50 Table A9.1 Planned versus actual Advisory Services and Analytics provided to Somalia, FY19–22............................................. 54 Table A11.1 World Bank Group’s active portfolio in Somalia, as of November 2021 .................................................................. 57 Table A12.1 Geographic distribution of World Bank lending projects ......................................................................................... 59 Table A13.1 IFC portfolio in Somalia, as of May 16, 2022 ............................................................................................................ 60 Figures Figure A8.1 Somalia’s integrated MPF/IDA portfolio, FY15–23 ……………………………………………………………………………………………….53 Figure A10.1 Mapping of revised Country Partnership Framework to Somalia’s Ninth National Development Plan and the Sustainable Development Goals …………………………………………………………………………………………………………………………………………….56 4 I. INTRODUCTION 1. This Performance and Learning Review (PLR) takes stock of progress on implementing the World Bank Group’s (WBG) Country Partnership Framework (CPF) for Somalia in fiscal years (FYs) 2019–22. During this period, the International Development Association (IDA) reengaged with Somalia, scaling its assistance to strengthen gov- ernance for basic service delivery and financing a response to and recovery from Somalia’s recent crises of Corona- virus disease (COVID-19), floods and drought, and locusts. The CPF was designed to help Somalia consolidate its nascent federal government system and address drivers of fragility through two CPF Focus Areas. The first— strengthening institutions for service delivery—includes four CPF objectives: supporting institutional effectiveness and financial management, intergovernmental resource sharing, social service delivery, and urban resilience. The second—restoring economic resilience and opportunities—includes four CPF objectives: supporting the business environment, access to finance, renewable energy, and water in rural areas. Given Somalia’s ineligibility for regular IDA resources in 2018, the CPF programmed only the first two years of implementation, financed from the Somalia Multi-Partner Fund (MPF) and IDA Pre-Arrears Clearance Grants (PACGs). The CPF anticipated an update in the PLR once Somalia reached the Decision Point of the Heavily Indebted Poor Countries (HIPC) Initiative and normalized relations with international financial institutions (IFIs). 2. Somalia is one of the most fragile countries in the world, with high levels of conflict and violence. Over the past two years, overlapping crises have deepened existing structural drivers of fragility, conflict, and violence (FCV) and threatened to reverse hard-won political, economic, and development progress made over the past dec- ade. The terror organization Al-Shabaab remains a persistent threat to peace and security. Even before the COVID- 19 pandemic and the ongoing 2021/22 Horn of Africa drought, close to half of the population needed humanitarian assistance and 2.9 million people were internally displaced. In the first few months of 2022, over half a million Somalis were displaced. Food insecurity is expected to worsen in 2022, partly because of Somalia’s dependence on importing wheat and other grains from the Russian Federation and Ukraine. 3. Despite this challenging humanitarian and security situation, Somalia reached the HIPC Decision Point in March 2020, allowing it to fully access IDA financing. The CPF’s initial financing from IDA PACGs and the MPF in FY19 and FY20 advanced key public financial management (PFMs) and economic reforms, strengthened institutional ca- pacity and service delivery, including through Somalia’s first safety net program, Baxnaano (“Uplifting”). After ar- rears clearance with IDA, the government secured additional resources of US$1.9 billion during FY20-FY22 from IDA18 Turnaround Regime (TAR) and IDA19 Turnaround Allocation (TAA), and the IDA Regional Integration and Crisis Response Windows, deepened support for PFM, institutional strengthening, and service delivery and financed activities to protect lives and livelihoods during the pandemic and alleviate food insecurity linked to floods, the locust invasion, and droughts. 4. Despite a political crisis during 2021 and early 2022 and a worsening security environment, Somalia con- tinued to implement economic reforms. The national elections expected in 2020 were postponed following disa- greements over the electoral model, leading to a protracted political and constitutional crisis which ended with the election of President Hassan Sheikh Mohamud on May 15, 2022. At the same time an ongoing transition in security arrangements from forces of the African Union Mission in Somalia (AMISOM) to the African Union Transition Mis- sion in Somalia (ATMIS) and ultimately to Somali national forces has seen Al Shabab take advantage of the political vacuum and step up attacks which worsened the economic climate. Yet, Somalia has made headway on improving core institutions and significant progress toward HIPC Completion Point triggers.1 5. This PLR extends the CPF one year through FY23 and adjusts the framework to incorporate increasing IDA assistance, enhance support for institution building and service delivery, and support for a green, resilient, and 1 Annex 4 provides the full set of triggers agreed to with the authorities toward the HIPC Completion Point. 1 inclusive recovery. The extension will allow time to engage with the new FGS and FMS governments on medium- term priorities before a new CPF is formulated. The PLR adjusts Focus Area 1 to better capture WBG efforts to build core government systems and expand social services during the recovery. It splits Focus Area 2 into a new Focus Area 2 supporting inclusive, private sector–led growth and a Focus Area 3, on strengthening resilience which ad- dresses the frequently recurring cycles of natural disasters that impede development and foster exclusion and con- tribute to Somalia’s fragility trap described in the 2018 Systematic Country Diagnostic (SCD, P155548). The revised CPF program reflects the WBG’s Strategy for Fragility, Conflict and Violence (FCV) 2020–2025, notably by remaining agile, focusing on Somalia’s fragility drivers, and adopting FCV–sensitive tools for portfolio management. 6. Through FY23, the revised CPF will support a pipeline of national and regional lending and complemen- tary activities of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). Under Focus Area 1, the WBG will provide budget support to help Somalia bridge fiscal gaps; improve governance; protect basic services; and finance health, education, and social protection programs. Under Focus Area 2, the CPF will deepen support for the business environment, digital development, and micro, small, and me- dium-size enterprises (MSMEs) and invest in fisheries, coastal development, urban, water, and energy infrastruc- ture, including through the regional Horn of Africa Initiative (HoAI). IFC will support the creation of markets and mobilization of private capital, including by strengthening the business environment, the financial sector, and in- vestment promotion, and laying foundations for public-private partnerships (PPPs) in infrastructure. MIGA will ex- plore opportunities to provide political risk insurance, leveraging the IDA Private Sector Window and trust funds as necessary, to help attract foreign direct investment (FDI). 7. The overall risk to achievement of the CPF remains High. To address the fiduciary, environmental, social and security risks, the PLR introduces a comprehensive Risk Management Framework (RMF) and continue to deepen Somalia’s institutional capacity in fiduciary, environmental and social risk management to manage WBG resources and development projects effectively. The World Bank will continue applying strict fiduciary controls and increasing the use of tools appropriate to Somalia’s FCV context, such as remote supervision, third-party monitoring (TPM), and technical implementation support through United Nations (UN) agencies. The RMF, will also build client capac- ity in Security Risk Management (SRM) as IDA expands support for infrastructure and direct service delivery in inse- cure areas. The high-risk environment also requires an adaptable, flexible, and shock-responsive approach to pro- ject- and portfolio management. Adopting good practice from other FCV countries facing similar challenges will continue to inform the Somalia approach. II. MAIN CHANGES IN COUNTRY CONTEXT Somalia’s political evolution has been turbulent amid a changing security landscape 8. Somalia still faces substantial political fault lines on core and complex federal and political matters in an environment of low trust among political players and the emerging high stakes associated with debt relief and greater aid flows. During the CPF period, the country experienced a protracted political impasse beginning in late 2020 following stalled efforts to finalize the constitution. On September 17, 2020, stakeholders agreed to hold in- direct, clan-based elections for Parliament ahead of the expiration of the mandate of President Mr. Mohammed Abdullahi Mohamed (also known as President Farmaajo) on February 8, 2021. These elections were then delayed, creating a political crisis for almost two years until the election of President Hassan Sheikh Mohamud on May 15, 2022. Reflecting Somalia’s delay in its electoral process in 2021, the WBG applied Operations Policy (OP) 7.30 (on dealings with de facto governments) to Somalia between April 2021 and May 2022. The FGS’s dialogue with Soma- liland also remains challenging, with disagreements on security, airspace management, and the sharing of develop- ment assistance. Meanwhile, the country faces continued lack of constitutional clarity on key federal matters as a result of the stalled constitutional review process. 9. Somalia also faces increased risks of insecurity, amid growing clan-based militias and an ongoing transi- tion from African Union Mission in Somalia/African Union Transition Mission in Somalia (AMISOM/ATMIS) to 2 Somali national forces. Reported conflict-related fatalities have decreased in recent years2, however Al-Shabaab continues to exploit divisions and launch intermittent attacks. Notably, violence flared in February and April 2021 amid the electoral impasse. The FGS has made progress in rebuilding Somalia’s National Army (SNA), but it has made only limited headway on integrating regional militias, and there is uncertainty about the SNA’s ability to main- tain security amid the planned departure of AMISOM/ATMIS forces over the coming years. Al-Shabab and other extremist groups, including the Islamic State, will likely pay close attention to the political process and exploit op- portunities to sow further instability and violence.3 The recent spate of pandemic, weather and economic shocks suggest that Somalia’s dual development traps—a “high-frequency” fragility trap and a “low frequency” resilience trap may be converging. 10. The CPF identified both a high-frequency fragility trap manifested by Somalia’s turbulent politics and weak fiscal space for services, which undermines citizen trust in the state, and a low-frequency resilience trap, in which natural disasters and external shocks thwart development efforts and deepen exclusion. During the CPF period, Somalia has experienced the multiple shocks of the COVID-19 pandemic, mounting food insecurity from flooding, an ongoing Horn of Africa drought, an historic Desert Locust invasion, and the recent global spike in food and fuel prices. These shocks have strained Somalia’s limited fiscal space, its emerging institutions and weak supply chains, and threatened a large number of households even as the country’s nascent safety nets are being expanded. They are being exacerbated by climate change, which increases temperatures and the number and severity of droughts, floods, and other natural disasters. Building resilience to climate change and shocks have become even more critical to reducing Somalia’s fragility and increasing the quality of life of Somalis. 11. The impact of the crises on households has been severe. As of June 7, 2022, the number of confirmed cases of COVID-19 had reached 26,565 with 1,361 deaths, with a cumulative case fatality rate of 5.2 percent. House- hold surveys in July 2020 noted that 78 percent of households reported a reduction in wages, 21 percent reported having to stop their work activity, and 32 percent reported an adult not having eaten for an entire day. Erratic rains caused additional havoc in Somalia with severe flooding in 2019/20 displacing more than a million people. The Desert Locust outbreak in 2019/20—the worst in 25 years—decimated crops and affected more than 2.6 million people in 25 districts, of whom about a quarter million had already been deemed in crisis or worse in food insecurity (Integrated Food Security Phase Classification (IPC) 3+). Then from April 2020, more than 80 percent of Somalia’s territory faced drought conditions. As of September 2021, almost half the population required humanitarian assis- tance, and 2.9 million remained internally displaced due to conflict and natural disasters. Almost 40 percent of the population is estimated to have been food insecure between April and May 20224. 12. These shocks are projected to increase poverty and increase the risk of fragility, conflict, and violence. According to the Somali High Frequency Survey (SHFS), in 2017/18, nearly 70 percent of Somalis were deprived in two or more poverty dimensions (monetary, electricity, education, or water and sanitation); poverty was higher in rural areas and among internally displaced persons (IDPs). The share of the population living below the poverty line is expected to have risen from 69 percent in 2019 to 71 percent in 2021, largely as a result of economic contraction in 2020 and shocks from natural disasters. The crises have exacerbated social protection challenges and fostered gender-based violence, leaving women and children among the most vulnerable groups in the country. Meanwhile, Somalia’s growing youth population—75 percent of Somalis are under 30—remains susceptible to economic disil- lusionment and appeals from violent groups. Displacement to urban areas may increase following localized flooding, the Desert Locust invasion, and rising insecurity, particularly in the southern and central regions. 2 Armed Conflict Location & Event Data Project (ACLED) 2022 3 AlShabaab retains the ability to conduct large scale attacks in Mogadishu, including against the international community, and in the re- cently recovered areas in Lower Shabelle. 4 Various reports, FAO Food Security and Nutritional Analysis Unit – Somalia (2022) 3 A significant scale-up in aid since arrears clearance has helped Somalia address these multiple crises. 13. Somalia’s attainment of the HIPC Decision Point and clearance of international financial institution ar- rears provided interim debt relief and opened access to new Official Development Assistance (ODA). By March 2020, Somalia had fulfilled the HIPC Decision Point requirements, including developing a Ninth National Develop- ment Plan (NDP9) 2020–24 as its interim Poverty Reduction Strategy; achieving a satisfactory track record under International Monetary Fund (IMF) and IDA programs; and agreement on floating Completion Point triggers (see Annex 4). This progress helped pave the way for approval of a three-year Extended Credit Facility (ECF) and Ex- tended Fund Facility (EFF) program (for US$395.5 million equivalent) with the IMF in March 2020 to help anchor reforms between the HIPC Decision and Completion Points. After a first successful review in November 2020, pro- gress slowed during the political impasse in 2021/22, and the Second and Third review were approved in June 2022. The WBG increased financing commitments from US$116 million in FY19 to US$1.83 billion by FY22 and the African Development Bank (AfDB) portfolio totaled US$325.4 million by July 2020. 14. The increase in bilateral ODA to Somalia has slowed recently, constrained by tightening donor envelopes in the pandemic period and subsequent global economic downturn. In June 2021, donors reported US$685 million in development aid, a 35 percent decrease from the high of US$1 billion reported for 2020. The United States pro- vided half of all humanitarian aid in 2021 (US$635 million out of US$1.2 billion). Nevertheless, Somalia stands to benefit from additional bilateral debt relief upon reaching the HIPC Completion Point.5 As such, maintaining the economic reform agenda to reach the HIPC Completion Point will be critical for supporting macroeconomic stability and access to needed external resources. Somalia’s growth outlook remains uncertain, after a modest recovery in 2021. 15. The cycle of shocks has muted Somalia’s growth from what was expected following HIPC Decision Point in March 2020. Real per capita growth rates averaged only 0.1 percent between 2014 and 2021. Upon reaching the HIPC Decision Point, Somalia was expected to experience economic growth of 3.2 percent, rising to 3.5-4.0 percent over the medium term. Instead, the economy contracted by an estimated 0.3 percent in 2020, followed by a modest recovery to an estimated 2.2 percent growth in 2021 as private sector activity picked up in urban areas and remittances inflows continued to be robust. More recently, Horn of Africa drought has affected Somalia’s lim- ited domestic agricultural production, including in livestock, the country’s primary export, and a rise in the prices of wheat and fuel stemming from the war in Ukraine are placing strains on household expenditures, particularly among the poor. In March 2022, inflation had reached 6 percent, mostly due to higher food prices. Looking forward, the economy is expected to make a modest recovery in 2022, with growth of 2.7 percent. 16. The repeated shocks have also undercut Somalia’s private sector, reducing sales and employment by about 30 percent and leaving most firms with liquidity challenges. The World Bank Somalia COVID-19 Enterprise Survey, February 2020 to January 2021, revealed that 62 percent of formal businesses in Somalia had temporarily suspended operations at least once because of COVID-19 disruptions, on average for about ten weeks. Three quar- ters (75 percent) of firms experienced a decline in sales between 2019 and 2020, falling to 52 percent of firms by the end of 2020. The share of firms facing liquidity and cash flow shortages reached 90 percent in June/July 2020, before falling to about 50 percent by the end of 2020. By January 2021, about 80 percent of firms had delayed payments to service providers and tax authorities. 17. Somalia remains highly dependent on aid and remittances. In 2020, ODA represented 43 percent to GDP and remittances 31 percent, while FDI and domestic revenues remain low, at 9 percent and 4 percent, respectively. Despite gains in revenue collection, FGS and FMS governments have limited fiscal space to address development priorities. The FGS had improved domestic resource mobilization, reflected in an increase in the tax-to-GDP ratio 5Debt relief under the HIPC Initiative after Somalia reaches the Completion Point could reduce FGS external debt from US$5.2 billion at end-2018 to US$557 million in net present value terms. 4 from a low of 1.3 percent in 2013 to 4.6 percent in 2019. The multiple crises reversed this trend, with the ratio falling to an estimated 4.3 percent in 2020. Fiscal space remains constrained, and the country has limited options to borrow under HIPC. 18. A resumption of IFI financing and other ODA facilitated a swift response to the series of shocks, although later delayed by the political impasse, and now somewhat constrained by global developments. Following arrears clearance, early budget support from IDA6 and the AfDB helped cushion revenue shortfalls across regions, with the FGS increasing transfers to the FMS from 0.9 percent of GDP in 2019 to 2.7 percent in 2020. Increased financing supported basic government operations, the delivery of essential services, and the implementation of reforms. So- malia is also dependent on grant inflows (budget support) to service IFI debt, including to IDA, and stay on track with HIPC requirements. In 2021, delays in programmed budget support stemming from the protracted election process contributed to a precarious fiscal situation. In August 2021, the IMF provided a SDR 156.6 million allocation to support the Central Bank of Somalia, replenish fiscal buffers, build reserves, and support certain budgeted ex- penditures. The government remains committed to state building, basic service delivery and economic recovery. 19. In October 2019, the FGS published a new National Development Plan (NDP9) for 2020 –24. The CPF was aligned with NDP8 (covering 2017–19), which had ambitious targets for democracy, peace building, state building, and five broad sector themes: economic development, effective and efficient institutions, social and human devel- opment, infrastructure, and resilience. The FGS focused the NDP9 more sharply on poverty reduction, in line with the HIPC program and supported higher commitments and expenditures on social services in FY21, and larger in- tergovernmental transfers to increased pro-poor spending. NDP9 covers four themes: inclusive and accountable politics; security and the rule of law; inclusive economic growth; and social development, and includes cross-cutting themes, such as strengthening gender equality, building resilience to climate and exogenous shocks, and addressing the plight of Internally displaced people (IDPs). 20. Commendable progress has been made in completing a substantive number of HIPC Completion Point triggers, including publication of audited financial accounts, debt bulletins, and the Somalia Annual Fact Book; rat- ification of the United Nations Convention Against Corruption; and agreements concerning the roles and responsi- bilities of the FGS and the FMS in the education sector, and a framework for a joint national health strategy. 21. Before and through the political impasse in 2021/22, the FGS and FMS demonstrated strong commitment to the NDP9 and HIPC objectives to strengthen governance and service delivery, to rebuild the social contract and to foster private sector–led growth. The FGS and FMS has worked with development partners to bridge fiscal short- falls to fund salaries, basic services, and crisis response, including through investments in COVID-19 response and vaccines, direct assistance to pandemic and disaster-affected households, and relief to businesses. Somalia has made solid if incremental progress on institution building, federal relations, notably through the Finance Ministers Fiscal Forum (FMFF), and basic service delivery. It invested in public institutions, improved macro-fiscal manage- ment, increased pro-poor expenditure, increased transfers from the FGS to FMS, and improved fiscal reporting. 22. Over the longer term, the FGS and FMS remain committed to a resilient and inclusive recovery, through investments in education, health, social protection, and disaster risk management, alongside efforts to strengthen federal governance and resource-sharing, safeguard macro-fiscal stability, while building institutions, services, and basic infrastructure. The FGS aims to promote climate change adaptation and mitigation in agriculture and other sectors, and institute mechanisms to better plan for and respond to shocks. NDP9 commits Somalia to making pol- icies gender sensitive and undertaking strategies to empower women. Finally, the NDP9 seeks through greater par- ticipation in regional programs supporting infrastructure and access to markets. 6In June 2020, the World Bank delivered a Supplemental Development Policy Financing (DPF) (P174064) of US$55 million, enabling the FGS to increase intergovernmental grants to the FMS to address the crises. 5 III. SUMMARY OF PROGRAM IMPLEMENTATION Portfolio performance 23. Somalia has rapidly absorbed the substantial increase in IDA financing well beyond the CPF’s indicative IDA commitments of US$140 million for FY19–FY20, based on a continuation of PACGs. The CPF inherited eight operations totaling US$144 million in commitments funded by the MPF and IDA PACGs.7 IDA commitments rose from US$98 million in FY19 to US$903 million in FY20 (of which US$420 million was for the Somalia Re-engagement and Reform Development Policy Financing [DPF, P171570], facilitating IDA arrears clearance). The rapid increase in FY20 commitments was financed by IDA18 Turn-Around (TAR) financing of U$218 million, an IDA arrears clearance set-aside of US$380 million, IDA reallocations to Somalia of US$164 million, and US$110 million from the IDA Crisis Response and Regional Integration Windows.8 In FY21, new commitments rose to US$445 million with three pro- jects and three Additional Financings, resourced by Somalia’s Performance-Based Allocation (PBA) of US$106 mil- lion and TAA of US$259.7 million. Somalia’s access to TAR/TAA funds was contingent on progress on a country turnaround in state building, stability, federal relations, and socioeconomic development.9 By June 2022, the port- folio stood at 17 projects, comprising US$1.83 billion in commitments. (Annex 5 provides details on planned versus actual lending.) 24. Somalia’s rapid absorption of this IDA financing has been helped by the “troika” of governance projects to build on the pilot interventions financed by the MPF. The Somalia Recurrent Cost and Reform Financing (RCRF) series (P173731), the Somalia Capacity Injection Project (P149971), and the Domestic Revenue Mobilization and Public Financial Management Capacity Strengthening Project (P166206) helped build basic government capacity and government systems, alongside the expansion of project funding channeled through the government. A robust analytical program on the role of opportunities for state building, also finance by the MPF, provided the knowledge to better target the early scale up of IDA financing. 25. In FY21 and FY22, the WBG restructured operations and directed new IDA lending to respond to ongoing shocks, protect and build human capital, and support a resilient and inclusive recovery. Activities were aligned with the WBG Crisis Response Framework for COVID-19 and focused on saving lives, protecting the poor, and main- taining business growth. They included emergency and crisis support to individuals and small and medium-size en- terprises (SMEs) and human capital projects. 26. WBG assistance has been affected by the political impasse and domestic contestation on the distribution of aid resources. The contested extension of the then President’s term beyond the constitutional mandate triggered a WBG review under Operational Policy (OP) 7.30 in April 202110 which recommended continuing disbursements on ongoing operation projects but limiting new commitments to operations focused on crisis response and protecting lives and human capital. The application of OP 7.30 was lifted following the presidential election on May 15, 2022. As World Bank financing contributed 78 percent of external revenue in 2020 and 95 percent in 2021, expectations are high among political actors on how such flows should be distributed as part of wider political settlement, espe- cially regarding Somaliland. The World Bank’s technical approach to program design and accounting for limited client capacities, efficient and transparent targeting, and access and security constraints often does not match these expectations. The ensuing dialogue has increased project preparation timelines and, at times, undermined efficient resource allocation. 7 These operations supported recurrent financing in FGS, PFM in central agencies, line ministry capacity building, and investments in water, information and communication technology (ICT), local development, private sector development, and civil service reform in Somaliland. 8 The different dollars amount noted for FY20 (US$902.5 million and US$873.3 million) are attributable to backloading of IDA18 resources for FY20 and exchange rate variations between IDA allocations and approved project financing. 9 The IDA18 TAR and IDA19 TAA regimes provide additional resources beyond the PBA for countries emerging from conflict, social/political crisis, or disengagement, where a window of opportunity exists for IDA to reengage or intensify engagement. 10 OP 7.30 lays out the conditions under which the World Bank can suspend disbursements for existing country financing instruments be- cause of the accession to power by a de facto government by means not provided for in a country’s constitution. 6 27. Although client capacity is still weak, fiduciary risks remain substantial and ESF risks are high, the World Bank remains committed to using and building country’s fiduciary, environmental and social risk management systems. The FGS/FMS have been required to rapidly develop systems and processes in line with WBG requirements and build capacities to execute projects in line with World Bank fiduciary standards. Given the limited institutional capacity, the use of country systems for recipient-executed investments has presented challenges which are likely to grow under the expansion and decentralization of the World Bank portfolio. To address this, the WBG provided extensive capacity-building programs in project management, financial management, procurement, and safeguards and introduced measures to strengthen the management of portfolio risks (fiduciary, environmental and social, security). Security concerns and COVID-19 restrictions slowed the preparation and implementation of projects by hampering in-person consultations and missions. The WBG responded by engaging in more frequent virtual meet- ings, given the FCV environment, and continued to deploy a Third-Party Monitoring (TPM) agent across the portfo- lio. Lack of security has prevented the WBG from posting staff to its Country Office in Somalia. 28. Despite these challenges, the World Bank portfolio is of good quality but preparing for future challenges given the high risk-high reward nature of operations in Somalia. Currently, 69 percent of the 17 active projects are Satisfactory on progress toward Development Objectives (DO), and 44 percent are Satisfactory on Implementation Progress (IP) with the remaining projects rated Moderately Satisfactory. Forty-seven percent of projects are rated High Risk; political and governance risks of all projects are rated High or Substantial. The Investment Project Financ- ing (IPF) disbursement rate was 58.7 percent in FY20, 34.6 percent in FY21 and 20 percent in FY22. As the program decentralizes, investing beyond governance operations into basic service delivery and infrastructure, the expecta- tion is that the portfolio performance will soften as has been anticipated with a range of preparatory, remedial, and supplementary implementation support already planned. 29. Under the CPF, Advisory Services and Analytics (ASA) and Technical Assistance (TA) have helped bridge key knowledge gaps, inform policy dialogue, and build client capacity. More than 90 percent of the CPF’s indicative ASA programs have been completed or are under implementation (see Annex 8). The active ASA portfolio includes 15 products with a strong programmatic profile focused on capacity building and policy dialogue. Key ASA under CPF Focus Area 1 included a poverty analysis (FY19), financial governance dialogue, an urbanization review (FY21), advisory support on social protection, public finance for the security sector, programmatic public expenditure re- views (PERs) and a Country Economic Memorandum (CEM, FY22). Two reports on governance, Reflections on the Future Role of the State in Somalia from the Perspective of Aid Effectiveness (2022) and Understanding Somalia’s Social Contract and State-Building Efforts: Consequences for Donor Interventions (2021) have informed the inter- governmental discussions among key stakeholders on federalism and reform ambition, while the Somalia Economic Update series has promoted open, evidence-based discussions on economic policy. Key products under CPF Focus Area 2 include ASA on customs reform, livestock insurance, and transboundary water resource management. IFC and MIGA support 30. IFC’s work in Somalia is on track. IFC activities have focused on CPF Focus Area 2. As of February 2020, IFC’s Somalia Private Sector Development program, funded by the IFC Somalia Trust Fund, had supported the following sectors and active projects: energy (Somalia Unlocking Sectoral Investment Program [SUSIP]), Somalia Energy En- gagement), financial institutions (FIDEP), investment climate reforms (SICRP 2), ICT (SUSIP), investment legal train- ing (SOMINA), and fostering Public Private Partnerships (PPPs) in targeted infrastructure projects (Somalia PPP). The Somalia Investment Climate Reform Project-2 (IFC 603600) supports improvements to business regulation and achieved the enactment of the Companies Act, after more than three years of support from IFC and the World Bank, opening the door to other reforms supporting formalization and investment. SICRP2 also supported trade reforms and the launch of the Somalia Trade Information Portal (STIP). The SUSIP continues to provide support to the Na- tional Communications Authority. IFC has begun coordinating more with the World Bank where priorities converge, such as the livestock value chain and the energy sector, and on development policy reforms governing the private sector. 7 31. Somalia became the 182nd member of MIGA in March 2020, and MIGA has been exploring opportunities to attract private sector finance and solutions to the country. MIGA is concentrating on projects that would sup- port CPF Focus Area 2 on inclusive, private sector led growth, including increasing access to renewable energy (CPF Objective 2.3). Partnerships 32. The WBG has remained a major player in aid coordination. The 2012 Somali Compact established a mech- anism for country ownership and donor coordination which the World Bank, AfDB, and the United Nations (UN) have supported through trust funds, including the MPF. A Mutual Accountability Framework (MAF) was agreed in 2017, updated in 2019 to align with the NDP9, and has provided some of the underpinning for Somalia’s TAR/TAA allocations. Although this aid architecture was suspended during the political impasse in 2021, it continued to pro- vide a forum for decisions on high-priority operations and to engage the FGS and FMS. The WBG has a leading role in the HIPC process, together with the IMF, international financial institutions, and Paris Club creditors, while the UN political, development, and humanitarian mission in Somalia coordinates on political and security issues. WBG integration into these frameworks ensures coordination with security, development, humanitarian, and political actors. 33. The MPF continues to be instrumental in piloting new approaches, deepening implementation support, co-financing, and donor coordination. Established in 2014 and supported by 10 donors,11 the MPF was the primary source of WBG financing in Somalia until arrears clearances, and instrumental in building core government systems, expanding services and investments at both federal and state levels, and creating knowledge. IDA financing is build- ing on MPF–financed projects in energy, social protection, governance, private sector and urban development, health, and education. The MPF continues to facilitate donor coordination and support enhanced oversight of World Bank-financed programs, through TPM, and new platforms, such as the Somalia Gender Equity Platform and the Enhanced Governance Platform. A recent agreement has extended the MPF through 2029. 34. Partnerships along the humanitarian-development nexus will remain critical to reduce Somalia’s reliance on short-term humanitarian flows. Somalia’s ODA reached 43 percent of GDP in 2020 with roughly equal shares of humanitarian and development aid. By the first half of 2021, development aid represented 55 percent of total ODA. The FGS, FMS, and development partners have developed the Somalia Recovery and Resilience Framework (RRF), outlining how Somalia can “break the cycle of vulnerability and humanitarian crisis” and better support early action to emerging crises. One key result is the Famine Action Mechanism (FAM) in Somalia, which enabled scale-up of early action to address the ongoing Horn of Africa drought. The Somalia Crisis Recovery Project (SCRP) (P173315) and the MPF are helping both to strengthen crisis preparedness and, through a crisis recovery platform, integrated crisis recovery financing between UN and World Bank. Progress on CPF objectives 35. Progress on CPF objectives is largely on track. Annex 3 provides a detailed assessment of progress on the CPF results matrix. Three CPF objectives are on track, three are largely on track, and two are partially on track. Significant gains in Focus Area 1 are attributable to headway on building institutional and financial capacity through the “troika” of governance projects. CPF results were strongly oriented toward outputs, however, especially in gov- ernance and institution building, reflecting Somali’s process of building a viable federal system; major challenges remain in improving institutions and service delivery with a view to strengthening the social contract. 11 The MPF is supported by the European Union, the United Kingdom, Germany, Sweden, Norway, Denmark, Switzerland, Finland, the United States, Italy, and the World Bank State and Peacebuilding Fund. 8 CPF Focus Area 1: Strengthening Institutions to Deliver Services 36. The CPF is on track for improving PFM and institutional effectiveness (CPF Objective 1.1). With support of the MPF–funded Capacity Injection Project (CIP) and the Somaliland Civil Service Reform Project (P155123), the FGS has assisted ministries, departments, and agencies (MDAs) to develop management plans; strengthened human resources functions; and, in line with this key CPF indicator, financed the appointment of female staff to line minis- tries and core government agencies. Under the Recurrent Cost and Reform Financing (RCRF), the percent of civil servants paid on time rose from 8 percent in 2018 to 75 percent in December 2020. With World Bank support, the authorities improved budget execution, accounting, and auditing, including making headway on a CPF indicator related to upgrading audit standards and completing MDA audits. 37. The CPF is on track for enhancing domestic revenue and resource sharing (CPF Objective 1.2). The World Bank and IMF supported initiation of a revenue mobilization strategy, a new revenue law clarifying FGS/FMS re- sponsibilities, development of tax policy units, and automation of tax registration and receipts. Inland domestic revenue rose 37 percent between 2018 and 2020. The RCRF program has played a key role in convening ministers of finance to reach agreements and harmonize the approach to fiscal transfers. 38. Somalia is largely on track for improving systems for inclusive social services (CPF Objective 1.3), notably through the Baxnaano safety net program, which includes the development of a national social registry that is al- ready reaching 200,000 households. With support of the RCRF, 944 female health workers and supervisors have been trained, equipped, with ICT–based data collection tools, and deployed to health facilities across Somalia. Ac- cording to the digital reports submitted since February 2022, 25 percent of pregnant women were referred to health facilities by female health workers. Proficiency testing of nearly 3,000 teachers has been undertaken. Support for economic and other services for GBV survivors was limited, because of early closure of the Inclusive Community Resilience and GBV pilot project (P157591) as a result of administrative challenges. 39. Somalia is on track for building municipalities’ capacity in urban resilience (CPF Objective 1.4), with sup- port of the Somalia Urban Resilience Project (SURP). Despite some challenges, such as delays associated with inse- curity in Mogadishu, the CPF has improved roads and other urban infrastructure, with a focus on serving IDPs and women, and made headway on generating urban employment, including for youth. CPF Focus Area 2: Restoring Economic Resilience and Opportunities 40. With World Bank and IFC support, Somalia is largely on track for improving the business environment and lowering barriers to entry (CPF Objective 2.1). With assistance from IFC, the FY16 Somali Core Economic Insti- tutions and Opportunities Program (SCORE, P152241), and the FY19 SCALED-UP, Somalia made progress on key CPF and project indicators, such as adopting laws and regulations to strengthen the business climate, launching an online business registration system in Mogadishu, improving payment systems and anti-money laundering/com- bating the financing of terrorism (AML/CFT), and approving new mobile money regulations. 41. The CPF is largely on track for increasing access to finance and digital development (CPF Objective 2.2). IFC’s Financial Institutions Development Project (FIDEP) commissioned a diagnostic covering broad topics of MSME banking, agribusiness finance, and digital finance. The outcome of the study will provide input to the design of targeted solutions to enhance financial inclusion, including digital finance. In line with CPF indicators, SCALED-UP established the MSME Financing Facility (Gargaara), building on the MPF–financed Somalia Core Economic Institu- tions and Opportunities Program (SCORE), which mobilized US$6.5 million in private financing and created more than 2,000 jobs through its catalytic matching grant scheme. In addition, the FGS has adopted a digital identification (ID) policy and made progress on issuing licenses to telecom operators. 42. Progress on increasing access to renewable energy (CPF Objective 2.3) is partially on track. The Somalia Electricity Access Project (P165497) is expected to meet the CPF target of providing households with electricity 9 services through solar home systems (SHS), leveraging results-based grants (RBG) to providers, but the project is only partly on track for supplying energy generation capacity, given a very ambitious CPF target. IFC’s Somalia Un- locking Sectoral Investment Project (SUSIP) is supporting FGS efforts to develop the Electricity Energy Act and sub- sequent regulations. 43. Progress on improving access to water through rural resilience and productivity (CPF Objective 2.4) is only partially on track, because of a delay in the FY19 Water for Agro-pastoral Productivity and Resilience (Biyoole) Project (P167826). Progress has been made on site selection, engineering designs, and construction of water points and rehabilitation of rangeland infrastructure, but the CPF target on access to improved water sources is unlikely to be fully achieved by 2022. IV. EMERGING LESSONS 44. The CPF implementation has yielded longer-term lessons on the WBG’s role in supporting state building and service delivery and shorter-term lessons on how the WBG can help Somalia achieve a resilient recovery from the multiple crises by remaining flexible, adaptable, and responsive to shocks. Key lessons particularly applicable to this CPF period include the following: • The WBG and donors will continue to face trade-offs on how to support state building and legitimacy of Soma- lia’s nascent federal system. For much of the ODA, public services continue to be delivered by Non-Governmental Organizations (NGOs) and the private sector, undermining citizen perceptions of state legitimacy. In this context, the WBG should continue to leverage its competitive advantages to help Somalia build the capacity of the FGS and FMS to govern and deliver services effectively. • WBG should remained focused on Somalia’s drivers of fragility and its longer -term trajectory toward stability. The WBG experience in Somalia reaffirms the importance of remaining engaged over the long term despite polit- ical, security, and humanitarian crises, a key recommendation of the 2011 World Development Report and the WBG FCV Strategy (2020). Gains in the effectiveness and delivery of public services and investments in longer- term resilience to climate and other shocks are critical to pulling Somalia out of its fragility and resilience traps. • Investing in core government systems laid the foundation for a successful scale up of IDA financing. Ahead of IDA reengagement, the WBG focused on the critical work of building and using country systems, strengthening local capacity, and supporting core state functions. Somalia would not have been able to absorb the significant increase in financing without these early investment in systems financed through the MPF. • The approach of piloting, scaling up, and learning-by-doing has been appropriate in this FCV context. With sup- port of the MPF, IDA, and other partners, Somalia has achieved good results in key sectors, such as social protec- tion, by building on analytical work to develop and test small pilot programs, then scaling programs operationally and geographically where feasible. The WBG will continue to adopt modular, phased approaches to piloting and scaling projects, using feedback loops and adaptive learning. • Leveraging partnerships to align performance-based instruments has reinforced incentives for building institu- tions and stay on track toward HIPC Completion Point. The partnership between IFIs and development partners facilitated agreement on comprehensive HIPC Completion Point triggers. Subsequent budget support operations from the World Bank, IMF and the European Union, performance innovations in World Bank supported projects12, and TAA/TAR requirements have proved valuable in incentivizing required progress on reforms. These policy re- forms were further supported by a “troika” of governance projects and partner support. Continued coordination across IFIs will help to focus government’s limited capacities on coherent and feasible sets of policies reforms and ensure technical support. 12For example. the use of IPF with Performance-Based Conditions (PBCs) was expanded to include reforms at the Central Bank of Somalia (CBS) under the SCALED-UP project 10 • The engagement to promote strong and equitable intergovernmental financial relations with the FGS/FMS has many positive spillovers. Dialogue with the FGS and the Finance Ministers Fiscal Forum (FMFF) has emphasized the effectiveness of promoting political compacts through strong technical analysis. Moreover, this Forum has provided an avenue to consult on project design, resource allocation and even security risk management at a high level. • Consolidating project management could accelerate capacity building and could reduce risks to WBG-financed projects. The Ministry of Finance’s External Assistance Fiduciary Section (EAFS) has proven effective in facilitating financial management for projects and supporting the growth of the portfolio into the FMS. Adopting a common approach to core project functions, for example, PIU salary scales, and consolidating project management within counterpart institutions should allow more efficiency in capacity building and reduce fiduciary and other risks. • An early and strong focus on community engagement and social risk management will be important to manage rising risks of local conflicts, social exclusion and GBV associated with increasing IDA flows to the front line. The influx of IDA and other external financing risks exacerbating local-level conflict, perceptions of exclusion, and GBV in communities and diminishing the impact on building state legitimacy. IDA operations will dedicate sufficient resources for building community ownership and understanding of project safeguards, PIU training and establish- ment of culturally appropriate and effective Grievance Redress Mechanisms (GRMs). • WBG should continue to invest in innovative modalities for portfolio management and citizen engagement in this FCV context. The WBG is already using technological and alternative tools for project monitoring and super- vision and GRMs, such as TPM, beneficiary scorecards, phone hotlines, radio broadcasts, and the Geo-Enabling initiative for Monitoring and Supervision (GEMS) tool. V. ADJUSTMENTS TO THE CPF PROGRAM 45. The PLR proposes to extend the CPF by one year, through FY23. The extension provides time for a resolu- tion of the political impasse and allows the WBG to engage the new government on medium-term priorities in the lead-up to a new CPF. The WBG will complete an SCD in FY23 to identify pathways for poverty reduction and rec- ommendations for WBG support.13 46. The PLR adjusts the CPF framework to evolving client demand, enhances the logical framework and, pro- grams new IDA financing toward a green, inclusive, and resilient recovery. Focus Area 1 is retitled to “strengthen institutions and financing for social service delivery,” reflecting the government’s focus on institutional building and financing services that can protect and build human capital. The PLR consolidates the three previous CPF objectives under Focus Area 1 into two upper-level objectives on (i) improving core government systems and capacity and (ii) improving service delivery systems and financing for human capital development. The PLR also splits Focus Area 2 into a new Focus Area 2 on enabling inclusive, private sector–led growth that retains two CPF objectives of improv- ing the business environment and access to finance/digital inclusion (except for minor language changes to objective titles to enhance logic and program linkages) and a new Focus Area 3 focused on strengthening resilience to support Somalia’s resilient recovery and capacity to respond to shocks. Focus Area 3 will assume the CPF objective of build- ing resilience of Somali municipalities from Focus Area 1 and includes an expanded objective on strengthening rural resilience and food security. Annex 9 shows the alignment of the revised CPF framework with the NDP9 pillars and the Sustainable Development Goals (SDSs). 47. WBG financing in FY23 will strengthen state and institutional capacity, continue relief, principally for COVID-19 and Horn of Africa drought, and build resilience to shocks, with an increase focus on regional operations 13In recognition of the fact that clarity on Somalia’s longer-term objectives is difficult amid the current political uncertainty, adjustments to the CPF framework will not yet incorporate the High-Level Outcomes (HLOs) and HLO indicators that the government aims to achieve over multiple CPF periods. The HLO approach and indicators will be adopted in consultations with Somali authorities in the lead-up to the next country strategy. 11 and core infrastructure. In FY23, Somalia will continue to access IDA20 TAA funds. For FY23, the notional country allocation (including TAA) is about US$459.3 million, with additional access to Regional Integration and Crisis Re- sponse Window resources. Under the IDA Sustainable Finance Development Policy (SDFP) Somalia’s FY21 fiscal sus- tainability performance and policy action (PPA) supported revenue mobilization with common customs duties at major ports, FY22 PPAs supported debt transparency through publication of debt bulletins and inclusion of debt statistics in the national budget legislation, and FY23 PPAs focus similarly on improved debt management and har- monization of import tariff schedule across major ports. 48. The first operation in a new Somalia Inclusive Growth DPF series (P174889) has been approved in July 2022 following appointment of the new administration, given the urgent fiscal needs after the prolonged political im- passe. The second operation (FY24) will support multisector reforms for inclusive growth and economic resilience in line with the HIPC program. Planned cross cutting analytical work include the Systematic Country Diagnostic, the Country Climate and Development Report, a Country Private Sector Diagnostic, and a Risk and Resilience Assess- ment Update. Table 1 shows key projects and ASAs. Highlights of new CPF program include: • In Focus Area 1, the Somalia Inclusive Growth DPF series will deepen support for reforms to increase revenue collection, establish rules for intergovernmental grants, and improve auditing. Additional Financing for the RCRF series is consolidating the program and supporting reforms to build systems for social service delivery and ex- pand citizen engagement at the FMS level. The Somalia Enhancing Public Resource Management Project (P151492) will help to ensure that the FGS and FMS have absorptive capacity within federal and state systems for key expenditure categories and social services. The MPF Financial System Initiative (FSI) will support Soma- lia’s reintegration into the global financial system and the integrity of the financial sector by supporting corre- spondent banking relationships for domestic financial institutions; facilitating international investments; and ensuring high standards of corporate governance, risk management, and safeguards against terrorist financing and illicit financing. The Somalia COVID-19 Emergency Vaccination Project (P176956) is supporting Somalia’s efforts to scale up citizen COVID-19 vaccinations while strengthening the health system and pandemic prepar- edness. The Somalia Empowering Women through Education and Skills Project (P176898) enhances female lit- eracy and numeracy and improve the leadership and income-generation skills of girls and women. IFC will also work on mainstreaming a gender focus in its operations. Focus Area 1 will be informed by a macro-fiscal as- sessment, cross cutting poverty household surveys, the Somalia Gender Equality Platform, and an Enhanced Governance Platform. • In Focus Area 2, the DPF series supports reforms enabling private sector–led growth, such as increasing access to renewable energy, improving management of fisheries, and increasing the number of registered companies. The Somali Electricity Sector Recovery Project (P173088) invests in Somalia’s distribution network; increases solar photovoltaic (PV) and hybrid energy generation systems; and increases access to lower-cost energy ser- vices, with a focus on schools, hospitals, and water infrastructure in underserved areas. The Regional Electricity Project (P174175) will support feasibility and other studies on the transmission interconnection between Ethi- opia and Somalia and support improvement of energy access in borderland areas that Somalia shares with Dji- bouti, Ethiopia, and Kenya. The Sustainable Fisheries and Coastal Blue Economy Development Project (P178032) will improve the management of selected fisheries and enhance economic benefits in coastal communities. Two regional projects will prepare a pipeline of transport investments and develop groundwater infrastructure and services in rural areas, complementing the Biyoole project. In addition, a regional project will help protect pas- toralists from drought by enhancing their access to financial products and linking them to markets through trade facilitation and private capital mobilization. The Currency Exchange Project (P176434) will enhance finan- cial inclusion by supporting the replacement of mostly counterfeit old notes which have disproportionately affected poor households. Focus Area 2 priorities and investments will be informed by the CEM completed in FY22, the MPF Financial Sector Initiative and a new round of enterprise surveys focused on impact and recovery from the COVID 19 pandemic. 12 IFC will scale advisory support to attract investment for growth and job creation. IFC’s Private Sector Develop- ment in Somalia (PSDS) Trust Fund will contribute to (i) strengthening the voice and capacity of the private sector in engaging with the government to improve the business climate; (ii) enhancing technical expertise and capacity of business-facing public institutions in formulation and enforcement of laws, rules, and regulations; and (iii) addressing inefficiencies in the financial, energy, and ICT sectors. IFC will explore market creation in the livestock sector aligned with IDA’s recently approved DRIVE operation and undertake upstream works alongside the new IDA Electricity Operation toward untapping investment opportunities in the energy sector. IFC will build a pipeline of investment opportunities in several sectors, including, but not limited to, micro- finance infrastructure, energy, and agribusiness while working to strengthen the overall enabling environment. MIGA’s is seeking to attract FDI to Somalia by helping to de-risk cross-border foreign investments. MIGA has an ongoing guarantee to support the Eastern and Southern African Trade and Development Bank to provide supply chain finance for international transactions in member countries, including Somalia. MIGA is also exploring the potential to guarantee a private sector investment in a captive solar power project and has begun discussions with several private funds and philanthropic foundations interested in providing long-term risk capital to SMEs to support job creation. • In Focus Area 3, an Additional Financing for SURP II (P170922) is expanding investments in urban infrastructure and services in Dhusamareb and Beledweyne. The ongoing Water for Agro-pastoral Productivity and Resilience Project (P167826) and a follow-on operation in FY23 will build water infrastructure and community manage- ment capacity, enhance sustainable land management, and support the adoption of climate-smart agriculture practices and technologies. This focus area will subsume active projects supporting resilience and disaster relief, including the SCRP (P173315) and Shock Responsive Safety Net for Locust Response Project (P174065). Somalia has also been confirmed eligible for the Early Response Financing to address the expected failure of another rainy season in the Horn of Africa. An Urbanization Review and Crisis Recovery Coordination platform will in- form CPF activities under Focus Area 3. Table 1 Proposed Lending and Key Advisory Services and Analytics for FY23 Cross-cutting: Somalia Inclusive Growth DPF 1 (P174889, US$100m) (approved) ASA: Systematic Country Diagnostic Focus Area 1 Focus Area 2 Focus Area 3 Somalia Enhancing Sustainable Fisheries and Blue Economy Coastal Development "Biyoole 2" Second Water for Public Resource (US$50m IDA) Agro-Pastoral Productivity and Management Pro- Somalia Currency Exchange Project (P176434, US$40m IDA) Resilience Project ject (P177298, (P177627, US$73m IDA) US$35m IDA, Horn of Africa Infrastructure Integration Project (P173119, US$15m MPF) US$38m IDA PBA, US$20m IDA RIW, US$5m Regional TF) Informal Settlement Up-grad- HoA Regional Integration for Sustainable Energy Supply Project ing (TBD) (P174175) (US$10-15m Regional IDA Grant) HoA Digital Integration Project (RI) (US$27.2m IDA PBA, FY23 US$52.8m IDA RIW) (IDA20) Regional Food Security (US$50m IDA PBA, US$100m IDA RIW) IFC: Somalia Skills Development program (603120) MIGA captive solar power project ASA Local inclusive gov- Country Private Sector Diagnostic Risk and Resilience Assess- ernance diagnostic Petroleum Sector diagnostic ment (RRA) update (P178901) IFC: Somalia Public-Private Partnership Advisory Project Country Climate and Develop- Capacity building (#605172) ment Report for Financial Man- agement IFC Private Sector Development in Somalia (PSDS) Trust Fund Urban Water Supply, Sanita- upstream activities tion and Waste Management Note: Regional projects are in italics. 13 49. The revised CPF is in line with the WBG’s Strategy for FCV 2020–25, the Global Crises Response Frame- work 2022, and the Green, Resilient, and Inclusive Development (GRID) framework. The CPF will continue to ad- dress Somalia’s drivers of fragility by strengthening core government systems and delivery of services for human capital and supporting an inclusive economic recovery through investments in the private sector and resilience. Close collaboration with the FCV Group on project-, portfolio-, and strategic-level support will feed back lessons to the Somalia program. The CPF will help stem socioeconomic exclusion and build resilience by increasing client ca- pacity to respond to disasters and supporting development of a social protection system. The WBG will remain flexible in CPF programing, adopt creative portfolio management techniques, and aim to increase its on-the-ground presence. In line with the GRID framework, the CPF will simultaneously address the short-term impacts of COVID- 19 and the longer-term risks of climate change, by investing in green infrastructure and climate change adaptation, strengthening disaster risk management, and taking a multipronged approach to human capital formation. The CPF program supports AFE priorities of universal access to power, water and broadband, human capital, gender and regional integration. 50. The WBG is prioritizing larger and consolidated lending projects through strategic use of Additional Fi- nancings. Average project size is expected to more than triple, from US$29.7 million in FY19 to US$101.6 million in FY23. From FY19 to FY23, the number of projects financed solely by the MPF is expected to fall from eight to two and the number of projects financed solely by IDA to rise from 1 to 14 (see Annex 7). The number of lending oper- ations, including co-financed projects, is expected to rise from 12 in FY19 to 20 in FY23. The World Bank will use Additional Financings to incrementally scale successful approaches and consolidate activities into fewer, larger sec- tor programs. The WBG will continue to use Results-Based Financing (RBF) approaches, given their success in accel- erating reforms, especially through RCRF and SCALED-UP. In Focus Area 1, the “troika” of governance projects will consolidate around the RCRF program and a comprehensive Public Resource Management program. The MPF will continue to play a role in piloting and scaling approaches, co-financing, project supervision, risk management, and sector and donor coordination. 51. The geographic allocation of IDA resources will require careful management. While most projects have a national and FGS focus, some, notably in crisis recovery, are focused on individual FMS. The World Bank has also been able to start allocating IDA financing to Somaliland, as of March 2022, when agreement was reached with the FGS and Somaliland. The WBG will develop a systematic approach to resource allocation with the FGS, building on principles of transparency, neutrality, technical criteria, performance, and Somali-led consultations. 52. The CPF will seek to build Somalia’s resilience to climate change. Somalia is expected to face irregular rainfall and nearly a 2° increase in maximum daily temperatures by 2080, increasing the risks of floods, droughts, and declines in agriculture productivity. Climate co-benefits trended upward over the CPF period from 23 percent in FY20 and 34 percent in FY21 to 55 percent in FY22, second highest percentage for East and Southern Africa, thanks largely to adaptation measures through projects in water, urban resilience, and crisis response14. 53. The WBG will deepen support to empower women and girls and address Gender-Based Violence. A Gen- der Equality Platform will strengthen the focus on gender across all operations informed, in part, by a 2019/20 review of portfolio GBV risks. The platform will serve to increase technical support to operations, conduct frontier research, identify innovative interventions to advance women’s socioeconomic empowerment, and expand policy dialogue and knowledge sharing across government and development partners. The Somalia Empowering Women and Girls through Education and Skills Project (P176898) supports girls’ and women’s education, including core skills in literacy, numeracy, and communications as well as skills for employment, entrepreneurship, and leadership. 54. The WBG will build client fiduciary skills and adopt a common, sector-wide approach to project manage- ment in strategic sectors and geographical areas. The World Bank’s strong portfolio performance (see paragraph 28) has benefitted from progressive development of client fiduciary capacity; use of country systems; tight controls; 14 Climate co-benefits refer to the share of WBG lending commitments that contribute to the mitigation of or adaptation to climate change. 14 and multiple layers of oversight. The CPF program will continue these tight controls, close implementation supports, and PFM capacity and systems building. It will also increase the use of the TPM agent and third-party capacity- building and technical support, with increased attention to fiduciary aspects, and continue efforts to reestablish corresponding banking relationships and combat AML/CTF. The WBG will support a pilot program that adopts a common PIU for projects in the same sector at the FGS or FMS level; centralized oversight of procurement; common safeguards specialists; and uniform approaches to Performance Based Financing. PIUs will continue to use Ministry of Finance systems for accounting and financial management to gradually build client capacity. An umbrella ap- proach, as used for financial management in targeted FMS, may also serve as regional platforms/centers of capacity for ESF and SRM. 55. The WBG will use FCV–sensitive, third-party, and digital methods for portfolio management. The CPF will support project teams to further technical innovations for broadening consultation, improving project monitoring and evaluation, and portfolio mapping. The WBG will continue to engage an enhanced TPM arrangement, including adherence to safeguards.15 For example, the Damal Caafimaad Health Project (P172031) will contract a TPM agent to undertake an annual household survey and develop an annual scorecard on health facility performance. 56. The WBG will step up efforts to manage security risks to project implementation and implementation support. It will support effective Security Risk Management (SRM) for portfolio activities, including the development of a World Bank Somalia SRM framework, which will delineate roles, responsibilities, and resources for developing and administering ESF and SRM in client operations. Complementing analytical activities and TA for the government funded by the MPF will establish a senior, cross-institutional advisory group to ensure institutional awareness and buy-in on security risks, seek guidance and identify best practices for SRM, and share lessons learned. VI. RISKS 57. The overall risk to the achievement of the CPF remains High. Political tensions risk delaying reforms, and insecurity remains an ongoing concern. Somalia remains vulnerable to shocks and has limited fiscal space to address them. Somalia’s capacity in program management, financial management, procurement, and environment and so- cial risk management is inadequate amid the IDA scale-up. The WBG is introducing a comprehensive RMF to better manage these and other portfolio risks. The RMF will include upstream consultations on portfolio activities to en- hance high-level buy-in by the FMFF as a platform for political dialogue and consensus. Details on key risks along with mitigation measures are described below. Table 2 Risk assessment for CPF outcomes Risk category Rating Political and governance High Macroeconomic High Sector strategies and policies Substantial Technical design of projects or programs Substantial Institutional capacity for implementation and sustainability High Fiduciary Substantial Environment and social High Stakeholders Substantial Overall High 58. Political and governance risks remain High. Momentum on key governance, economic, and social reforms could be undermined by political tensions and changes in the priorities of the new government. The implementation of the CPF program could be slowed by disagreements or tensions between the FGS and FMS. A rise in insurgent attacks could further destabilize Somalia’s political dynamics. Somalia’s demonstrable commitment to the IMF ECF 15 TPM can be used in myriad other situations, including independent audits and reviews of complex and sensitive matters, such as allega- tions of GBV or health and safety incidents. 15 program and HIPC process partially mitigates the risks of delayed reforms and a shift in client priorities. In addition, the WBG will continue to support state-building and key governance reforms in the FMFF, which has provided an effective channel for authorities to depoliticize and reach agreement on governance and economic policy reforms, including intergovernmental responsibilities and use of resources. 59. Macroeconomic risks remain High. Somalia’s economy remains vulnerable to shocks—including from ad- verse weather, disruptions in international trade, remittances or revenues, and rising inflation—which could trigger macroeconomic instability and impede reforms. Within the IMF Staff Monitored and ECF programs, DPF–supported reforms, the IDA Sustainable Development Finance Policy, and the HIPC Initiative—Somalia has however main- tained a prudent fiscal policy through recent crises, albeit constrained from new borrowing. To partially mitigate risks, the WBG program provides for additional budget support and TA to bridge fiscal gaps, improve macroeco- nomic management, and protect pro-poor spending while scaling assistance to MSMEs and growth-enabling infra- structure in vulnerable, underserved areas. 60. Sector strategies and policies related risks are Substantial. Somalia’s policy agenda is crowded and com- peting demands from domestic and external stakeholders could overwhelm the authorities’ limited capacity to im- plement the reforms and activities under the CPF. Weak policy and implementation management skills, gaps in technical skills for policy formulation, and limited interagency cooperation risk the implementation of the CPF. How- ever, FGS has delivered the ninth National Development Plan (NDP9) providing an effective framework for strategic reform priorities and discussions. Risks will be mitigated by continued technical assistance for policy formulation and implementation in key sectors and country-level World Bank engagement. 61. There are Substantial risks related to technical design. The technical complexity of operations is increasing will IDA financing. The portfolio now includes investment projects in human and infrastructure development, which are increasingly implemented by lower levels of government and spread out geographically in an already difficult and sometimes inaccessible landscape. Strengthening country systems and investing in human capital remain key. To mitigate this risk, the WBG will work upstream with the highest level of government to secure reform and im- plementation commitment, ensure that sufficient investments in public sector capacity building accompanies every operation, and apply additional resources for hands-on technical implementation support and risk management through the MPF. 62. Risks related to institutional capacity remain High, reflecting a politicized public sector with nascent insti- tutions, limited basic legal and regulatory frameworks, underdeveloped accountability mechanisms, and weak ca- pacity for service delivery. Projects are reliant on core government capacity which is not evolving at the same pace as the scale-up of the portfolio. The projects are implemented amid weak government institutional capacity that is evolving at different speeds in FGS and FMS. To reduce such risks, reforms supported by the Inclusive Growth DPF series and IPF portfolio will be carefully selected to build incrementally on past reforms supported by the WBG and accompanied by complementary ASA and IFC advisory services. Risks will be partly mitigated by close coordination with international partners, including through the RCRF program. The WBG will scale trainings for PIU staff on pro- ject management and adopt a common approach to core PIU functions to maximize on incipient capacity for pro- gram implementation. 63. Fiduciary risks remain Substantial. The government’s legal framework, procedures, and operational sys- tems remain new and incomplete, posing challenges to its overall reform program. AML/CTF risks are also High. Despite important reforms—and ongoing support from World Bank IPFs and ASAs and IMF programs— financial and procurement controls remain relatively weak, as does the capacity to manage contracts. In addition to close implementation support from strengthened World Bank fiduciary teams, IPFs are implemented with enhanced sup- port from the MPF for portfolio-wide enhanced fiduciary risk management, 100 percent prior review of procure- ment and operational costs, frequent reviews and reporting on key transactions and rely on third parties for moni- toring, capacity strengthening, and technical support. For large government-managed contracts with UN agencies, direct payments are made by the World Bank. Centralization of the financial management function at the FGS, 16 Somaliland and FMS levels and monthly detailed fiscal reporting from FGS and FMS to the World Bank and IMF, also strengthens accountability. 64. Social and environmental risks increased from Substantial to High. Somalia remains highly susceptible to climate change and climatic shocks, which can threaten community sustainability and drive social tensions and con- flict with negative spillovers on government and WBG programs. As IDA expands financing for core network infra- structure, the risks to workers, project officials and communities of insecurity and occupational health and safety issues may increase. But Somalia’s capacity to manage these risks are low and the legislative framework incomplete. The CPF will support development of dedicated client ESF, Gender Equality and SRM (see paragraph 56) platforms to accelerate development of and/or augment client, PIU and project staff capacities and pilot tools to enable re- mote portfolio supervision and citizen engagement. The HoAI Integration Incubator project will strengthen federal- and state-level ESF management across relevant sectoral ministries. 65. The stakeholder risk is classified as Substantial. Overall stakeholder commitment for implementing the CPF remains strong across the citizenry, government, and international partners. Nevertheless, risks associated with the rapid increase in financing across the state and down to community levels could fuel contestation that impedes implementation. Even following the conclusion of the elections and relatively peaceful transfer of power, the po- litical compact under the provisional constitution remains fragile and political contestation among key stakeholders has slowed the delivery of support to Somalia in the past. These risks are being mitigated through investments in citizen engagement and support to the intergovernmental forums across government, as well as improvements in M&E arrangements. In addition, a stable set of development partners are committed to providing knowledge and financial support in an organized, coordinated manner, with the WBG playing a prominent role in this process. 17 ANNEX 1. REVISED RESULTS MATRIX FOR SOMALIA FY19–23 CPF (FOR EVALUATION IN THE COMPLETION AND LEARNING REVIEW) Table A1.1 Revised results matrix for the Somalia FY19–23 CPF Focus Area 1: Strengthening institutions and financing for social service delivery This focus area will help build Somalia’s government systems and institutional and financial capacity to deliver basic services critical to human capital formation, poverty reduction, and consolidation of the nascent federal system. WBG activities will support key areas and triggers of the HIPC process related to PFM and delivery of social services. The first objec- tive focuses on strengthening core government systems and increasing financing for public services, including by strengthening staffing and institutional capacity of key MDAs; im- proving the management and accountability of public funds; strengthening domestic resource mobilization; and improving intergovernmental fiscal relations, including implementa- tion of revenue and resource-sharing arrangements in key sectors. The second objective strengthens delivery systems for services more directly affecting households, namely, health, COVID-19, education, and social protection services in response to the triple crisis. Objective 1.1: Improve core government systems and capacity Intervention logic: The FGS and FMS possess insufficient institutional and financial capacity to effectively deliver public services critical to rebuilding the social contract, partly because of limited institutional and human resource capacity, fledgling PFM systems, and low revenue mobilization, complicated by lack of agreement on revenue sharing. Lack of transpar- ency and accountability in the use of public resources has led to mistrust of public institutions. Somalia ranked 179th of 180 countries in Transparency International’s 2020 Percep- tions of Corruption Index. The FGS’s weak revenue-to-GDP ratio constrains state capacity to finance basic services, let alone respond to regular crises. Recent increases in revenue generation were driven by efficiencies in trade tax collection; accelerating gains requires strengthening core tax policies and tax administration. Achieving headway on intergovern- mental fiscal relations and revenue agreements between the FGS and FMS will be critical to legitimizing Somalia’s federal structure and providing adequate and equitable resources for service delivery. To help Somalia to overcome such challenges, the RCRF series and the Capacity Injection Project (P149971) helps finance institutions’ recurrent payroll costs, inject capable staff into prioritized line ministries, promote female recruitment in the civil service, and support pension and severance reforms within Somalia’s broader public sector strategy. The Somalia Reengagement and Reform DPF (P171570, FY20) supported reforms that strengthened fiscal management and qualified Somalia for HIPC debt relief. The Second Public Financial Management Capacity Strengthening Project (P151492) is strengthening systems for domestic revenue mobilization, expenditure control, and accountability in the FGS, Puntland, and Somaliland, including through auditing and automation of tax administration. An ASA from the Financial Systems Initiative (FSI) will help strengthen the integrity of Somalia’s financial sector by supporting correspondent banking relationships for domestic financial institutions and setting high standards for corporate governance, risk manage- ment, and safeguards against terrorist financing and illicit financing. The RCRF series is supporting intergovernmental dialogue on fiscal relations through the FMFF and greater fiscal transfers from the FGS to FMS for basic service delivery. The Inclusive Growth DPF series will support increased revenue from trade-related taxes, rules-based allocation for intergov- ernmental grants, and more frequent audit reports. CPF objective indicators WBG program Percent of civil service wage bill financed by the FGS budget (the FGS wage bill is funded by mul- Recently completed lending tiple sources, such as tax revenue and WBG/donor budget support ) FY20 Somalia Reengagement and Reform DPF (P171570) and FY20 Supplemental Baseline: 40 percent (2018) DPF (P174064) Target: 87.5 percent (end-2022) Ongoing lending: Female recruitment increased for middle and upper management positions in the civil service in FY15 Recurrent Cost and Reform Financing (RCRF) II (P154875) and FY19 Additional FGS and Puntland Financing (P167224) Baseline: 20 percent (2017) FY16 Second PFM Capacity Strengthening Project (P151492) and FY19 Additional Target: 30 percent (2022) Financing (P166206) FY16 Capacity Injection Project (P149971) Percentage of MDA audits completed and published in FGS, Somaliland, and Puntland FY16 Somaliland Civil Service Reform Project (P155123) Baseline: 0 percent (2018) FY20 Recurrent Cost and Reform Financing III (P173731) Target: 75 percent (2022) FY20 Integrated Statistics and Economic Planning Project (P171160) Additional Financing for Somalia Recurrent Cost & Reform Financing Project - Increase in real (adjusted for inflation) inland tax revenue collected (US$ millions) Phase III (P177900) Baseline: 38.6 (2018) FY23 Somalia Second Inclusive Growth DPO (174889) 18 Target: 46.2 million (2023), a 20 percent real increase above 2018 =, deflated by the CPI (2023) Data source: Ministry of Finance Proposed lending: Number of tax and nontax revenue instruments with basic processes automated at the FGS FY23 Somalia Currency Exchange Project (P172057) Baseline: 0 (2018) FY23 Somalia Enhancing Public Resource Management Project (P177298) Target: 4 (2023) Rules-based allocation for intergovernmental transfers to all FMS based on transparent criteria Ongoing ASA: in place Somali Socioeconomic Monitoring (P170762) Baseline: Not in place (2020) Somalia Economic Update Series Target: In place (2023) Somalia: Enhancing Governance Dialogue (P171974) Somalia Financial Governance Policy Support (P175711) Proposed ASA: Grant from Financial Sector Initiative Objective 1.2: Improve service delivery systems and financing for human capital Intervention logic: This objective will improve Somalia’s delivery systems for human capital development focused on basic health services; COVID-19 response/vaccinations; educa- tion services; and safety nets, particularly to respond to the triple crisis. WBG activities will support FGS/FMS efforts to deliver services directly to Somalis, with a view to enhancing government legitimacy and the social contract. Nonstate, private actors, and the humanitarian community have traditionally played an extraordinary role in providing basic social services in Somalia, but lack of government oversight has left quality and coverage in health, education, and social protection uneven and services costly. Somalia's education system is fragmented, with vast regions underserved. Primary school enrollment is a mere 20 percent, with few opportunities for rural children and girls. Teachers lack adequate skills, and learning outcomes are low. Somalia has chronically weak health indicators, and the capacity of the national health system to respond to COVID-19 and deploy vaccinations is limited. Safety net systems are inadequate to protect poor households from shocks. Somalis have historically relied on remittances and traditional and informal kinship systems for assistance during crises, but such systems have proved inadequate, prompting donors to provide humanitarian assistance to bridge gaps, sometimes undermining efforts to build country capac- ity. The RCRF series will provide cross-cutting support to improve intergovernmental coordination in the health and education sectors, finance recurrent costs of education sector staff, improve school supervision, support proficiency testing of teachers, and train and deploy a cadre of Female Health Workers (FHWs) to improve health services. The Improving Healthcare Services in Somalia Project (P172031, Damal Caafimaad) improves coverage of essential health and nutrition services, emphasizing maternal and child health; develop government stewardship capacity of the health sector; and integrate a Contingent Emergency Response Component (CERC) to leverage in the event of another crisis. The Somalia COVID-19 Emergency Vaccination Project (P176956) will strengthen pandemic preparedness and response, including through vaccine acquisition and deployment and community outreach to increase vaccine confidence. The Somalia Education for Human Capital Development Project (P172434) increases access to primary education, with a focus on girls and the disadvantaged, including by constructing school and improving the quality of instruction. World Bank lending in social protection will provide support and cash transfers to house- holds affected by the triple crisis while putting in place the building blocks of a shock-responsive safety net program, including development of a social registry, a Management Infor- mation System (MIS), and operational procedures for registration and targeting programs. The Somalia Empowering Women through Education and Skills Project (P176898) will enhance female literacy and numeracy and improve the leadership and income generation skills of girls and women. CPF objective indicators WBG program 19 Increase in percent of FGS’s MDA spending on social services delivery and social assistance ben- Recently completed lending: efits (as share of overall FGS budget) FY20 Somalia Reengagement and Reform DPF (P171570) and FY20 Supplemental Baseline: 4.4 percent (2018) DPF (P174064) Target: 12 percent (2022) Data source: Ministry of Finance, Budget Out-turn Ongoing lending: FY15 Recurrent Cost and Reform Financing (RCRF) II (P154875) and FY19 Additional Proportion of women 15–59 and children up to the age of 5 referred to health facilities by FHWs Financing (P167224) in selected federal member states FY20 Recurrent Cost and Reform Financing III (P173731) Baseline: 0 percent (2018) FY20 Somalia Crisis Recovery Project (P173315) and FY21 Additional Financing Target: 10 percent (2022) (P176343) Data source: District Health Information Software 2 (DHIS 2) and Health Management Infor- FY20 Somalia Shock-Responsive Safety Net for Human Capital Project (P171346) mation System (HMIS) and FY21 Additional Financing (P176368) FY20 Somalia Shock Responsive Safety Net for Locust Response Project (P174065) Teachers undergoing proficiency testing on literacy, numeracy, and classroom pedagogy in se- and FY21 Additional Financing (P176369) lected FMS (number) FY21 Improving Healthcare Services in Somalia Project (“Damal Caafimaad”) Baseline: 0 (2018) (P172031) Target: 2,622 (2022) FY21 Somalia Education for Human Capital Development Project (P172434) Data source: Ministry of Education Communiqué; third-party verification reports FY22 Somalia Empowering Women through Education and Skills Project (P176898) FY22 Somalia COVID-19 Emergency Vaccination Project (P1759656) Beneficiaries of social safety net programs (total number and number of women) FY22 Additional Financing for Somalia Recurrent Cost & Reform Financing Project - Baseline: 0 (2019) Phase III (P177900) Target: 1.2 million, including 600,000 women (2022) FY23 Somalia Second Inclusive Growth DPO (174889) Unified social registry developed (yes/no) Baseline: No (2018) Proposed lending: Target: Yes (2022) FY23 Somalia Enhancing Public Resource Management Project (P177298) Data source: Ministry of Labour and Social Affairs; SNHCP Progress Reports Ongoing ASA Somalia’s Investment Case to strengthen health service delivery (P173177) Somalia Social Protection Support: Building Blocks towards a National Social Pro- tection System (P168945) CHOICES evaluation (interventions for adolescents and their parents to transform gender norms in Somalia) (P165258) Engagement in Somalia's Health Sector ASA (P167976) Somalia Women's Empowerment Platform (P175129) Focus Area 2: Enabling inclusive private sector–led growth This focus area will support an inclusive, private sector-led economic recovery and growth, with a view to spurring business creation and increasing jobs, especially for women and at- risk youth, and reducing poverty. Somalia’s weak performance in key business processes such as starting a business, protecting minority investors, getting credit, getting electricity, and trading across borders hampers growth and business development. Objectives under this focus area will improve Somalia’s business and investment climates, including through regulatory reform and streamlined business registration; bridge gaps in growth-enabling infrastructure, including renewable energy and transport; improve access to finance for businesses particularly MSMEs; and further develop Somalia’s digital market and mobile financing opportunities, which can be a vector for longer-term growth and poverty reduction. Objective 2.1: Improve the business environment and economic foundations 20 Intervention logic: Somalia’s weak business environment reflects deficiencies in public service delivery, bureaucratic hurdles and regulatory deficiencies in private sector develop- ment, and gaps in growth-enabling infrastructure. Although Somalia’s private sector is large and vibrant, high informality and limited regulations deter investment and formal business creation. Strengthening the business climate, economic foundations, and job growth will require a clearer definition and application of the rules of the game, streamlined regulations and procedures for business creation and operation, and investments in energy and transport. The share of the population with access to energy is just 33 percent in urban areas and 4 percent in rural areas. Without a national grid, Somalia is served by isolated mini grids operated by private entities, which are largely unregulated and provide expensive, unreliable power for businesses and households. Somalia has potential for renewable energy, including solar and wind. Somalia's road network is in poor condition, impeding commerce. The WBG supports public-private dialogue to strengthen Somalia’s business climate, increase investment, and bridge infrastructure gaps. WBG development policy financing and invest- ment lending will support legal and regulatory reforms, implementation of a Companies Act streamlining rules for starting a business, and establishment of a one-stop shop for busi- ness registration. The CPF will support trade transparency (IFC) and trade facilitation and review options for economic and free trade zones, including a bankable industrial infrastruc- ture framework and related capacities (Special Economic Zones [ SEZs] and stronger PPP frameworks and capacities to increase private sector engagement). Reflecting low client capacity, the WBG will give priority to sectors with strong potential to catalyze growth—ICT, trade, finance, and energy. IDA and IFC will collaborate through the SCORE and SCALED- UP projects. The Electricity Access Project (P165497) will invest in off-grid solar products in urban, peri-urban, and rural areas, with a view to providing new or improved electricity services and supporting development of a private market in solar technologies. Additionally, the WBG will support a regulatory framework for Somalia’s electricity supply industry. The FY22 Somali Energy Sector Recovery Project (P173088) invests in Somalia’s distribution network, increase solar PV and hybrid energy generation systems, and increase access to lower-cost energy services. A regional transport operation will support preparation of feasibility and other studies and build implementation capacity for regional transport invest- ments. A regional borderlands project will focus on investments that help increase social cohesion by improving service delivery and expanding sustainable livelihoods in select border areas, including through cross-border trade. The Sustainable Fisheries and Blue Economy Development project will improve management of selected fisheries and enhance the eco- nomic benefits of Somalia’s vast fishing resources among governments and coastal communities. CPF objective indicators WBG program Increased private sector investment in key economic sectors (energy, livestock, fisheries, and ag- Recently completed lending: riculture) (US$ million) FY16 Somali Core Economic Institutions and Opportunities Program (SCORE, Baseline: 0 (2017) P155241) Target: 15 (2023) FY20 Somalia Reengagement and Reform DPF (P171570) and Supplemental Financ- Data source: IFC Project Completion Reports/Somalia Investment Promotion Agency/CBS ing (P174064) CBS core-banking system functional and scaled-up to support government business continuity Ongoing lending: and digital payments in Federal Member States (yes/no) FY19 Somalia Capacity Enhancement, Livelihoods and Entrepreneurship, through Baseline: No (2018) Digital Uplift Program (SCALED-UP) (P168115) Target: Yes (2022) FY19 Somali Electricity Access Project (P165497) Data source: SCALED-UP Additional Financing/completion report FY21 SCALED-UP Additional Financing (P174769) IFC: Somalia Investment Climate Reform Project II (#603600) Number of firms benefitting from reformed business registration requirements (total number IFC: Somalia Unlocking Sectoral Investment Project (SUSIP) #603088 and number of firms owned or managed by women) FY22 Somali Electricity Sector Recovery Project (P173088) Baseline: 0 (2018) FY22 Horn of Africa - Groundwater for Resilience Project (P174867) Target: 2,500, 30 percent of them owned or managed by women (2023) FY22 De-risking, inclusion and value enhancement of pastoral economies in the Data source: IFC Project Completion Reports/Somalia Investment Promotion Agency Horn of Africa (DRIVE) (P176517) Somaliland FY23 Somalia Second Inclusive Growth DPO (174889) Baseline: 0 (2018) Target: 400 (2023) Data source: IFC Project Completion Reports/Somaliland Ministry of Trade and Tourism Proposed lending: FY23 Somalia Currency Exchange Project (P176434) New investment leads registered by Somalia Investment Promotion Agency FY23 Somali Sustainable Fisheries Development Project (P178032) Baseline: 0 (2020) FY23 Horn of Africa Infrastructure Integration Project (P173119) 21 Target: 5 (2023) IFC: Somalia Skills Development program (603120) IFC: Somalia Public-Private Partnership Advisory Project (#605172) Total number of people and number of girls and women provided with new or improved elec- tricity services Ongoing ASA: Baseline: 0 (2018) Somalia Customs Support (P172650) Target: 113,900, of which 56,700 female (2023) Somalia: National Trade Strategy and Diagnostic Support for WTO Accession Data source: MTF Survey (P175939) Number of households with new stand-alone solar systems Proposed ASA: Baseline: 0 (2018) IFC: Country Private Sector Diagnostic Target: 21,500 (2022) Trade Strategy Support (P175939) Objective 2.2: Increase access to finance and digital inclusion Intervention logic: Limited access to finance is a constraint to investment and growth in Somalia. Nevertheless, the financial sector has demonstrated its capacity to adapt and inno- vate, as evidenced by the successful remittances sector and the rapid integration of mobile and financial services. With appropriate support, Somalia’s financial sector could leapfrog and provide Somalis with wider-ranging mobile financial services, thereby stimulating economic activity and building resilience. To support such a transformation, the WBG will strengthen the Central Bank of Somalia’s systems for safeguarding financial stability and integrity and help build critical market infrastructure and supervision capability, including through regulatory frameworks for mobile operators under the National Communications Authority (NCA). The WBG will support fast-tracked development of new financial products for entrepreneurs, including, women, youth, and displaced populations. IFC will engage with targeted firms to provide advisory services to microfinance institutions. Specifically, SCALED-UP will support the roll-out of a digital ID system, which will help Somalis access financial services and support Gargaara Company Limited, a financial institution that will provide loans to institutions that fund MSMEs. An Additional Financing for SCALED-UP will enhance support to the Gargaara Financing Facility to respond to pandemic-related impacts on businesses and scale assistance for digital infrastructure and digital government services, including remote work capabilities. The FY20 Somalia Reengagement and Reform DPF and its Supplemental Financing supported revisions to mobile money regulations to strengthen the stability and transparency of the mobile money system and supported formation of a stable national payments systems to enable reliable and low-cost transactions. CPF objective indicators WBG program Value of loans from MSME financing facility advanced by participating financial institutions in Recently completed lending: key economic sectors (US$ millions) FY15 ICT Sector Support in Somalia Phase II (P152358) Baseline: 0 (2018) FY16 Somali Core Economic Institutions and Opportunities Program (SCORE, Target: 20 (2023) P155241) Share to women owned MSMEs (percent) FY20 Somalia Reengagement and Reform DPF (P171570) and Supplemental Financ- Baseline: 0 (2018) ing (P174064) Target: 30 (2023) Ongoing lending: Number of firms that receive Business Development Services as part of COVID-19 response sup- FY19 Somalia Capacity Enhancement, Livelihoods and Entrepreneurship, through port Digital Uplift Program (SCALED-UP) (P168115) Baseline: 0 (2020) FY21 SCALED-UP Additional Financing (P174769) Target: 100 (2023) IFC: Somalia Investment Climate Reform Project II (603600) IFC: Somalia Unlocking Sectoral Investment Project (SUSIP 603088) Number of female SME beneficiaries of new financial products and services FY22 De-risking, inclusion and value enhancement of pastoral economies in the Baseline: 0 (2018) Horn of Africa (DRIVE) (P176517) Target: 50 (2022) FY23 Somalia Second Inclusive Growth DPO (174889) Data source: IFC Project Supervision Reports/ Project Completion Report Proposed lending: FY23 Somalia Currency Exchange Project (P176434) 22 Number of unique transactional accounts opened using a digital Customer Verification System IFC: Somalia Skills Development program (603120) (CVS) to enable electronic Know Your Customer (eKYC) protocols IFC: Somalia Public-Private Partnership Advisory Project (#605172) Baseline: 0 (2019) Proposed ASA: Target: 175,000 (2023) Country Private Sector Diagnostic Petroleum sector diagnostic IFC: Somalia Public-Private Partnership Advisory Project (#605172) IFC Private Sector Development in Somalia (PSDS) Trust Fund upstream activities Focus Area 3: Strengthening resilience This focus area will enhance the resilience of Somalia's economy and households to natural and other shocks. It will invest in urban infrastructure, such as roads and drainage, to enable selected cities to manage urban expansion and ensure sustainable economic growth amid increases in Somalia’s urban population. The focus area will invest in climate-friendly agriculture and water infrastructure to enhance economic and household resilience in rural areas; strengthen Somalia’s capacity in disaster planning and response; and provide short- term assistance to households affected by food insecurity linked to the triple crisis of locusts, floods, and COVID-19. Objective 3.1: Build the urban resilience of Somali municipalities Intervention logic: Somalia’s urban centers represent governance and economic hubs as well as safe havens for people fleeing the impact of shocks, but they are under increasing pressure from rural/urban migration and disruptions of COVID-19. Over half the population is urban, including many people living in camps or informal settlements, where the inci- dence of poverty is over 70 percent. Nevertheless, municipal governments represent a hopeful entry point for governance in Somalia. During the CPF period, the World Bank—with funding through the MPF—rolled out a national Urban Resilience Program, starting in FY19 with funding under the SURP (PP163857) for Mogadishu, Garowe, Kismayo, and Baidoa, building on the preparation of feasibility studies and the elaboration of an Urban Resilience Strategy. SURP II (P170922), approved in FY20, scaled investments within the SURP’s original cities and laid the groundwork for expansion to cities in Galmudug and Hirshabelle. It invests in urban infrastructure and services and institutional strengthening and analytics; it includes a CERC to respond to emergency needs (if required). In parallel, IDA will undertake a Somalia Urbanization Review to inform urbanization policy and planning and policy dialogue between mayors and the Federal Government. CPF objective indicators WBG program Number of beneficiaries in in Mogadishu, Garowe, Kismayo, and Baidoa are satisfied that the re- Ongoing lending: habilitation of secondary urban roads met their needs FY16 Somali Urban Investment Planning (P150374) Baseline: 0 (2018) FY19 Somalia Urban Resilience Project (P163857) Target: 2,500 (2023), of whom IDPs (20 percent) and host communities (30 percent) FY20 Somalia Urban Resilience Project II (P170922) Data source: Somali Urban Resilience Project monitoring reports and end of project survey Proposed lending: Number of people with access to improved roads (rehabilitated roads financed by a WBG–as- FY23 Somalia Urban Resilience Project Phase II Second Additional Financing sisted project) within a 500-mile range of Mogadishu, Garowe, Kismayo and Baidoa (P179775) Baseline: 0 (2018) FY23 Food Systems Resilience Program for Eastern and Southern Africa (MPA) Target: 8,000 (2023) of whom women (30 percent), IDPs (20 percent), and host communities (30 (178566) percent) Data source: Somali Urban Resilience Project monitoring reports and end of project survey Person days of employment created in Mogadishu, Garowe, Kismayo and Baidoa Baseline: 0 (2018) Target: 150,000 (2023), of which women (30 percent) and youth (30 percent) Data source: Somali Urban Resilience Project monitoring reports and end of project survey Objective 3.2: Strengthen rural resilience and food security Intervention logic: Somalia must invest in climate-friendly agriculture and water systems and build capacity to respond to disasters to strengthen the resilience of its rural economy, alleviate chronic food insecurity, and sustain poverty reduction. About half of the Somali population is rural pursuing livelihoods based on livestock herding, crop cultivation, and/or 23 fishing. However, agricultural productivity is undermined by inadequate access to water sources and water infrastructure, exacerbated by weak land management and cycles of climate and natural disasters, which has decreased rural incomes and exacerbated food insecurity. Somalia’s capacity in disaster management and response is limited. Key institutions, such as the Ministry of Humanitarian Affairs and Disaster Management (MoHADM), have inadequate human resource capacity, overlapping mandates, and insufficient financial re- sources. To enhance rural livelihoods and food security, CPF interventions will improve access to water resources and support agricultural development and livestock husbandry. The CPF (a) strengthens national and state institutional capacity and enhance community development and demand mobilization; (ii) improves access to and management of multiple-use water resources; (iii) supports improved environmental management (soil conservation, rangelands, and forests); and (iv) strengthens agricultural knowledge and innovation systems. WBG projects and ASA support crop and livestock production, with linkages made to improve value chains within productive sectors. Specifically, the Water for Agro-pastoral Produc- tivity and Resilience (P167286 [Biyoole]) project, and its follow-on operation in FY23 will invest in the build-out of water infrastructure and community management capacity, sustain- able land management, and the adoption of climate-smart agriculture practices and technologies. In parallel, the Somalia Crisis Recovery Project (SCRP) (P176343)) invest in flood control systems and water and sanitation infrastructure and build the capacity of MDAs to respond to flood and drought-related emergencies, by, for example, supporting hydromet and related early warning systems, establishing a locusts early warning system, and strengthening the Integrated Disease Surveillance and Response System (including for COVID-19). The SCRP (P176343) and the Somalia Shock Responsive Safety Net for Locust Response Project (P174065) provide cash transfers and emergency cash transfers to provide immediate relief to households affected by the multiple crises and 2022 drought. The FY22 Horn of Africa - Groundwater for Resilience Project (P174867) strengthens the resilience of communities to cope with and adapt to climate shocks through an enhanced management and use of groundwater resources. An FY23 Somali Sustainable Fisheries Development Project (P178032) project will improve management of selected fisheries and enhance economic benefits from the blue economy. CPF objective indicator WBG program Number of people in rural areas and share of women provided with access to improved water Ongoing lending: sources for multiple uses (domestic, livestock and horticulture) FY20 Water for Agro-pastoral Productivity and Resilience (P167826) Baseline: 0 (2018) FY20 Somalia Crisis Recovery Project (P173315) and FY21 Additional Financing Target: 125,000 (2023) of whom 50 percent women (P176343) FY20 Somalia Shock Responsive Safety Net for Locust Response Project (P174065) Number of producers adopting improved agricultural (cropping and livestock) technology and FY21 Additional Financing (P176369) Baseline: 0 (2018) FY20 Somalia Shock-Responsive Safety Net for Human Capital Project (P171346) Target: 25,000 (2023) and FY21 Additional Financing (P176368) FY22 Horn of Africa - Groundwater for Resilience Project (P174867) Establishment of national disaster preparedness and response mechanisms FY22 Second Additional Financing for the Shock Responsive Safety Net for Human Baseline: Not established (2019) Capital Project (P178730) Target: Established (2023) FY23 Somalia Second Inclusive Growth DPO (174889) FY22 Somalia Empowering Women through Education and Skills Project (P176898 Number of people benefitting from improved flood risk management Baseline: 0 (2019) Target: 525,000 (2023) Proposed lending: FY23 Somali Sustainable Fisheries Development Project (P178032) Number of people with improved access to livelihoods support in response to flood/drought FY23 Food Systems Resilience Program for Eastern and Southern Africa (MPA) shocks (of whom women) (178566) Baseline: 0 (2020) FY23 Water for Agro-pastoral Productivity and Resilience Biyoole II (P177627) Target: 1,203,650 (2023) of whom 116,375 women Ongoing ASA: Number of Locus-affected households receiving emergency cash transfers Somalia Social Protection Support: Building Blocks towards a National Social Pro- Baseline: 0 (2020) tection System (P168945) Target: 260,000 (2023) Somalia ESF and Security Management Capacity Building (P176672) Data source: Ministry of Labour and Social Affairs; SNLRP Progress Reports CHOICES Evaluation (Interventions for Young Adolescents and Their Parents to Transform Gender Norms in Somalia) (P1652598) Support to Somalia Recovery and Resilience (P174724) 24 Somali Socioeconomic Monitoring (P170762) Somalia’s Investment Case to Strengthen Health Service Delivery (P173177) Somalia Climate Risk Assessment (P176246) Proposed ASA: FY23 Urban Water Supply and Sanitation 25 ANNEX 2. CHANGES TO ORIGINAL FY19–22 COUNTRY PARTNERSHIP FRAMEWORK RESULTS MATRIX Table A2.1 details substantive changes to the CPF results matrix, including revised, new, and consolidated CPF objectives and revised, dropped, or added CPF indicators. All supplementary indicators in the original CPF results matrix were dropped. The table does not capture minor changes made to correct grammar or enhance clarity Table A2.1 Matrix of changes to the original FY19–22 CPF results matrix Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) The original CPF Focus Area I: Strengthen Institutions to Deliver Services was renamed to: Focus Area 1: Strengthening Institutions and Financing for Social Service Delivery Move CPF Indicator 1.1.1. on domestic spending shifting from security and public admin- Indicator aligns to theme of Objec- istration sectors to service delivery of health and education sectors to CPF Objective 1.2 tive 1.2. (see below) Drop CPF indicator 1.1.2 Indicator an intermediate mile- Strengthened audit methods implemented: stone/upper-level auditing indica- Baseline: Audit procedures and methodology are not aligned with International Organiza- tor added below. tion of Supreme Audit Institutions (INTOSAI) standards in FGS, Puntland, and Somaliland Objective 1.1: Im- (2018) prove public finance Target: Modernized audit methods applied for Government Financial Statement Audits in Objectives 1.1 and FGS and Somaliland (2022) management and in- 1.2 were consoli- stitutional effective- dated into: Revise CPF Indicator 1.2.1 ness CPF Objective 1.1. Im- Increase in real terms (adjusted for inflation) inland tax revenue collected (US$, millions) Update revenue baseline and tar- Baseline: 24 38.6 (2018) get in line with government num- prove core govern- Target: 48 46.2m (20222023), equaling 20 percent real increase above 2018 value, de- bers/performance. Objective 1.2: En- ment systems and ca- flated by the CPI (2023) hance domestic rev- pacity Data source: Ministry of Finance enue mobilization to broaden the Ob- jective’s scope and Drop CPF Indicator 1.2.2. and resource shar- Develop and approve legislation to harmonize taxes between FGS and FMS (yes/no) Indicator an intermediate mile- enhance logic ing Baseline: No (2018) stone. Target: Yes (2022) Data Source: Ministry of Finance, IMF Article IV, World Bank SEU) 26 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) Add CPF Indicator Better reflect contributions and A rules-based allocation mechanism for intergovernmental transfers to all federal mem- evolution of RCRF program and ber states based on transparent criteria is in place World Bank Budget Support. Baseline: no transparent rules-based transfer for all FMS (2020) Target: Transparent rules-based allocation mechanism and applied is in place (2023) Add CPF Indicator Percent of civil service wage bill financed by the FGS budget Baseline: 40 percent (2018) Target: 87.5 percent (end-2022) Add CPF Indicator Percentage of MDA audits completed and published in FGS, Somaliland, and Puntland Better reflect contributions of the Baseline: 0 percent (2018) Somalia Capital Injection Project. Target: 75 percent (2022) Add CPF Indicator Number of tax and non-tax revenue instruments with basic processes automated at the Reflect expected results of Second FGS PFM Capacity Strengthening Pro- Baseline: 0 (2018) ject. Target: 4 (2022) Add CPF Indicator: Increase in percent of FGS’s MDA spending on social services delivery and social assis- Moved from the original CPF Ob- tance benefits (as a percent of the overall FGS budget) jective 1.1 to better reflect human Baseline: 4.4 percent (2018) capital theme of shifting spending Target: 12 percent (2022) to social sectors. Data source: Ministry of Finance, Budget Out-turn Objective 1.3 became: Objective 1.3: Im- CPF Objective 1.2. Revise CPF Indicator prove delivery of Improve service deliv- Proportion of women of child-bearing age (15-59 years) and children 0-59 months re- systems for inclu- ery systems and fi- ferred to health facilities by Female Health Workers in selected federal member states Missing baseline in original matrix. sive social services nancing for human Baseline: 0 percent (2018) Target: 10 percent (2022) capital Associated World Bank -financed project dropped (i.e., Inclusive 27 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) Delete CPF Indicator 1.3.2. Community Resilience and GBV Pi- Gender Based Violence (GBV) survivors16 in selected communities in Garowe, Puntland lot project) who report they receive complete case management and psychosocial support services in line with international standards (percent) Baseline: 60 (2017) Target: 90 (2022) Data source: SGBV Project Revise CPF Indicator Update target for RCRF program. Teachers undergoing proficiency testing on literacy, numeracy and classroom pedagogy in selected federal member states (number): Baseline: 0 (2018) Target: 3,000 2,622 (2022) Data source: Ministry of Education Communiqué; Third Party verification reports Add CPF Indicator Reflect contributions of Shock Re- Beneficiaries of social safety net programs (number, of whom women) sponsive Safety Net for Human Baseline: 0 in 2019 Capital Project. Target: 1.2m in 2022 (600,000 of whom women) Add CPF indicator (previously was a Supplementary Indicator) Move to CPF Indicator column to Developed unified social registry (yes/no): reflect importance of the social Baseline: No (2018) registry to Somalia’s development Target: Yes (2022) program. Data Source: Ministry of Labour and Social Affairs; SNHCP Progress Reports Moved to CPF Focus Objective 1.4: Build Area 3 (Strengthen The urban resilience theme better the capacity of So- Resilience) as [See description of CPF Objective 3.1 below] fits under Focus Area 3. mali municipalities Objective 3.1. Build for urban resilience the urban resilience of Somali municipali- ties 16 Vulnerable women and female youth selected as part of a pilot project 28 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) The CPF Focus Area 2. Expand Economic Opportunities and Enhanced Resilience was split into: • Focus Area 2. Enabling Inclusive Private Sector-led Growth, whose objectives are detailed immediately below; and • Focus Area 3. Strengthen Resilience This change was made to unpack the broad, dual-themed Focus Area and account for scaled IDA programming since the design of the CPF, notably in building resilience in the wake of the “triple crisis”. Revise Indicator 2.1.1 Increased private sector investment in key economic sectors (i.e., energy, livestock, fisher- Decrease target to align to new re- ies and agriculture) (US$, million) alities and CPF scope. Baseline: 0 (2017) Target: 30 (2022) 15 (2023) Revise CPF Indicator 2.1.2 Businesses and investment licensing registered and operational under One Stop Shop Better reflect scope of SCALED-UP Number of firms having benefited from reformed business registration requirements project. (number) FGS Baseline: 0 (2018) Target: 400 2500 (2022 2023) Objective 2.1: Im- Data Source: IFC Project Completion Reports/Somalia Investment Promotion Agency prove the business Objectives 2.1 and 2.3 environment and were consolidated Somaliland Baseline: 0 (2018) lowering barriers to into: Target: 400 200 (20223) entry CPF Objective 2.1 Im- Data Source: IFC Project Completion Reports prove the business Objective 2.3: In- environment and Add CPF Indicator crease access to re- economic founda- New Investment leads registered by Somalia Investment Promotion Agency Better reflect scope of IFC engage- newable energy tions Baseline: 0 in 2020 ment. Target: 5 (2023) Add CPF Indicator (moved from Supplementary Indicator Column) CBS core-banking system functional and scaled-up to support government business conti- Better reflect scope of SCALED-UP nuity and digital payments in Federal Member States (yes/no) project and the importance of this Baseline: No (2018) results to CPF development pro- Target: Yes (2022) gram. Data source: SCALED-UP Additional Financing/completion report Add CPF Indicator (moved from the deleted original CPF Objective 2.3 on energy) 29 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) People provided with new or improved electricity services (number, gender disaggre- Reflect the objective’s focus on gated) energy as a key part of Somalia’s Baseline: 0 (2018) economic foundations, as well as Target: 113,900, of whom 56,700 female (2023) contributions of the Somali Elec- Data source: MTF Survey tricity Access Project Add CPF Indicator Indicator 2.3.3. Number of households with new stand-alone solar systems Baseline: 0 (2018) Target: 21,500 (2022) Revise Indicator 2.2.1. Loans Value of MSME loans from MSME financing facility advanced by participating finan- Better reflect agreed project tar- cial institutions in key economic sectors, e.g. energy, fisheries, livestock, agriculture17 (US$ gets of SCALED-UP, including the millions): lack of M&E of youth in project. Baseline: 0 (2018) Target: 15 20 (2022 2023) Of which to women owned MSMEs (percent) Baseline: 0 percent (2018) Target: 30 percent (2022 2023) Title of CPF Objective Of youth owned MSMEs reached Objective 2.2: Ac- Baseline: 0 percent (2018) 2.2 was changed to: cess to finance to Target: 10 percent (2022) Objective 2.2: In- increase inclusion crease access to fi- Drop CPF Indicator 2.2.2 Associated WBG project dropped and digital develop- nance and digital in- Indicator 2.2.2: Proportion of selected women with increased access to financial resources (i.e., Inclusive Community Resili- ment opportunities clusion after participating in Village Savings and Loan Association Groups in Garowe (percent) ence and GBV Pilot project) Baseline: 60 (2017) Target: 80 (2022) Revise Indicator 2.2.3. Broaden scope of indicator and Active transactional accounts18 opened with unique digital ID, including mobile money align with project activities. (number, million) Number of people accessing financial services using a digital ID Baseline: 0 (2018) Target: 1 900,000 (2022 2023) Drop Indicator 2.2.4. 17 Indicator is specific to World Bank Group-assisted project 18 Transaction accounts are financial products for receiving funds, keeping funds for safe keeping or savings, as well as making payments. 30 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) Licenses and authorizations issued by the National Communications Authority for tele- Indicator an intermediate mile- communication services (number): stone. Baseline: 0 (2018) Target: 5 (2022) Add CPF Indicator Number of firms that receive Business Development Services (BSD) as part of the COVID- Better reflect work of SCALED-UP. 19 response support Baseline: 0 in 2020 Target: 100 in 2023 Add CPF Indicator Women SME beneficiaries of new financial products and services (number) Better reflect IFC’s contributions Baseline: 0 (2018) to WBG program and CPF gender Target: 50 (2022) goals. Data source: IFC Project Supervision Reports/ Project Completion Report Delete CPF indicator 2.3.1. Indicator 2.3.1: Proportion of people provided with new or improved electricity services (households) Baseline: 0 (2018) Target: 28,750 (2022) This Objective was Data source: MTF Survey Objective 2.3: In- deleted, with a key Delete CPF Indicator 2.3.2. WBG activities in energy assimi- crease access to re- indicator on access to lated into CPF Objective 2.1 Generation capacity of energy constructed or rehabilitated (including renewable energy): newable energy energy services (percent) moved to CPF Objec- Baseline: 0 (2018) tive 2.1. Target: 30 (2022) Data source: MFT Survey The PLR introduces CPF Focus Area 3. Strengthen Resilience 31 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) New Objective 3.1. [Note: Changes below are to the indicators in the original CPF Objective 1.4] Build the urban resili- ence of Somali munic- Revise target of CPF Indicator ipalities Indicator 1.4.2. People with access to improved roads within a 500m range in Mogadishu, Reflect more ambitious target None (the content of this Ob- Garowe, Kismayo and Baidoa (number): given the one-year CPF extension. jective is same as the Baseline: 0 (2018) original CPF Objective Target: 6,000 (2022) 8,000 (2023) 1.4. Build the capacity The target year for all other CPF Indicators was changed from 2022 to 2023. of Somali municipalities for urban resilience) [Note: Changes below are to the indicators in the original CPF Objective 2.4.] Revise CPF Indicator People in rural areas provided with access to improved water sources for multiple uses: Align to framework of the “Biyoole domestic, livestock and horticulture (number) 2” project and CPF extension. New Objective 3.2: Baseline: 1,300,000 0 (2018) Strengthen rural resil- Target: 1,550,000 people (2022) 125,000 (2023) of whom 50 percent women ience and food secu- rity Of which are women (number): (content of this Objec- Baseline: 700,000 (2017)51 Target: 840,000 (2022) tive is generally the None same as the original Delete CPF Indicator Lower-level milestone. CPF Producers reached with agricultural assets or services and producers (number): Objective 2.4. Increase Target: increase by 250,000 (2022) access to water through rural resilience Of which are women (number) and productivity, with a Target: increase by 125,000 (2022) stronger focus food se- curity and disaster re- Delete CPF Indicator Lower-level milestone. Rangelands managed by communities (hectares): sponse) Target: increase by 100,000 (2022) Delete CPF Indicator Land brought under catchment management systems (hectares): Lower-level milestone. Target: increase by 5000 (2022) 32 Changes to CPF Indicators Original CPF Ob- Changes to (Revised, New, Dropped) jective(s) CPF Objective(s) (For revision: Strikethrough=deletion; underline=addition) Reason(s) for change(s) Add CPF Indicators Producers adopting improved agricultural (cropping and livestock) technology (number): Align to framework of “Biyoole 2” Baseline: 0 in 2018; project. Target: 25,000 (2023) Establishment of national disaster preparedness and response mechanisms Capture contributions of the So- Baseline: Not established in 2019 malia Crisis Recovery Project in Target: Established in 2023 disaster preparedness including food risk management Number of people benefitting from improved flood risk management Baseline: 0 in 2019 Target: [525,000 in 2023] Number of people with improved access to livelihoods support in response to Capture contributions of the So- flood/drought shocks (of whom women) malia Crisis Recovery Project in Baseline: 0 (2020) protecting incomes in response to Target: 1,203,650 (2023, of whom 116,375 women) shocks. Locus-affected households receiving emergency cash transfers Baseline: 0 (2020) Capture activities of the Shock Re- Target: 260,000 (2023) sponsive Safety Nets for Locust Re- Data Source: Ministry of Labour and Social Affairs; SNLRP Progress Reports sponse Project 33 ANNEX 3. ASSESSMENT OF ORIGINAL FY19–22 COUNTRY PARTNERSHIP FRAMEWORK RESULTS MATRIX Table A.3.1 assesses the original FY19–22 CPF results matrix, indicating whether objectives and indicators have been achieved or are on track, partly on track, or off track. CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Focus Area 1: Strengthening Institutions to Deliver Services Objective 1.1: Improve public finance man- Overall: On track. Public Financial Management Law enacted in December 2019. Substantial progress in PFM and agement and institutional effectiveness institutional capacity in MDAs in FGS, PSS, and Somaliland. Strong gains in expenditures processed through the FMIS commitment system. Under the Capital Injection Project (P149971), 218 staff appointed to line minis- tries/core government agencies to strengthen institutional capacity. FGS completed organizational reviews for all 48 MDAs. Nineteen MDAs developed change management plans in FGS and Puntland, and 16 have operational HR/FM functions. More women were appointed to middle and upper management positions in FGS (2.7 percent at DG level, 13.8 percent at Director of Department level, and 22 percent at Head of Section level as of February 2021) and Puntland. Under the Somaliland Civil Service Reform Strengthening Project, the GoSL completed payroll cleaning and reorganization of 18 MDAs. Indicator 1.1.1: Domestic spending shifting from Largely on track. Between January and September 2021, total spending on the social sectors through country sys- security and public administration sectors to ser- tems was US$56.9 million out of a total of US$329.7 million, or 17 percent of total expenditures over the same vice delivery of health and education sectors (per- period. In comparison, expenditures on social services were 11 percent over the same period in 2020. Overall, the cent of government budget): share of spending on social services over total expenditures is rising year-on-year, at six percent in 2019 and 4 Baseline: 3 (2018) percent in 2018. Target: 12 (2022) Data source: Ministry of Finance, Budget Out- turn Indicator 1.1.2: Strengthened audit methods im- On track. The Office of the Auditor General (OAG) is progressively adopting a Compliance Audit Manual and Finan- plemented: cial Audit Manual developed with TA from the INTOSAI Development Institute. The audit of FGS financial state- Baseline: Audit procedures and methodology are ments for the year ended December 2018 was carried out using ISSAIs (audit standards of INTOSAI). The FGS carried not aligned with International Organization of Su- out compliance audits for 24 MDAs, including 5 security sector institutions. In addition, Somaliland carried out 22 preme Audit Institutions (INTOSAI) standards in audits of MDAs, and Puntland covered 18 MDAs in their annual audit. FGS, Puntland and Somaliland (2018) Target: Modernized audit methods applied for Government Financial Statement Audits in FGS and Somaliland (2022) Data source: Annual Financial Statement Audits, Office of Auditor General 34 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Indicator 1.1.3: Female recruitment increased for On track. 63 women have been recruited to key positions (25 in FGS and 38 in Puntland), representing 32 percent middle and upper management positions in the of the total recruitment of 195 staff. civil service in FGS and Puntland (percent): Baseline: 20 (2017) Target: 30 (2022) Data source: National Civil Service Commission (NCSC) annual recruitment reports Objective 1.2: Enhance domestic revenue mobili- Overall Rating: On track. Revenue mobilization strategy was initiated. A new Revenue Law was enacted allocating zation and resource sharing revenue raising power between FGS/FMS. Tax Policy Units for FGS and Puntland were established, staffed, and are performing basic revenue performance analysis. Functions were automated for Taxpayer Registration/Issuance of Taxpayer Identification Numbers, and for Revenue Receipts. Under the RCRF series, the Government increased the share of civil servants paid on time from eight percent in 2018 to 83 percent by June 2020. Government transfers to FMS rose from US$15 million in 2018 to US$30.7 million in the first half of 2020. Indicator 1.2.1: Increase in real terms (adjusted On track. Inland revenue collected reached US$44.5 million adjusted for inflation in 2020. However, the baseline for inflation) inland revenue collected (US$, mil- for 2018 was much higher at US$38.6 million compared with US$$24 million estimated at CPF design. lions) Baseline: 24 (2018) Target: 48 (2022) Data source: Ministry of Finance Inland Revenue Report Indicator 1.2.2: Develop and approve legislation On track. In December 2019, a Revenue Law was enacted that includes allocation of revenue-raising powers be- to harmonize taxes between FGS and FMS tween the FGS and FMS. The Revenue Act clarifies responsibilities and revenue administration by addressing issues (yes/no) related to taxpayer registration, assessment, refunds, certificates of tax clearance, and tax agents. Baseline: No (2018) Target: Yes (2022) Data Source: Ministry of Finance, IMF Article IV, World Bank SEU) Indicator 1.2.3: Citizen engagement of business On track. 1974 (475 female) taxpayers engaged in FGS and Puntland on tax policies and administration as of No- owners on tax policies and administration (num- vember 2021 (from DRMPFM Quarterly Report). ber): Baseline: 0 (2018) 35 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Target: 1,000 (2022) Data Source: PFMDRM project monitoring re- ports Federal Government of Somalia inland revenue in- Largely on track. Two processes are automated—the Taxpayer Registration with TIN Issuance and Revenue Re- strument (tax and non-tax) and basic processes19 ceipts. The FGS and PSS have completed procurement of a supplier to determine needs, design, and implement an effectively automated (percent) Integrated Tax Administration Automated System (ITAS). Target: Additional 5020 (2022) Data source: Ministry of Finance Inland Revenue Directorate Report Policy Framework for Inter-Governmental Fiscal On track. In 2019, the FGS and FMS Ministers of Finance met at the Kampala Finance Ministers Fiscal Forum and Transfers between FGS and FMS adopted collectively approved the Inter-Governmental Fiscal Transfer Policy Paper, a joint RCRF/EU reform benchmark (DLI) (yes/no) for 2019. Operationalization of the inter-governmental fiscal policy framework is ongoing. In August 2020, a draft Baseline: No (2018) policy paper was tabled at the FMFF in Mogadishu, which included: (i) principles to guide FGS transfer allocations Target: Yes (2022) to FMS/BRA; (ii) comparative analysis, reflecting regional context; and (iii) long-term views. Data source: Ministry of Finance Inland Revenue Directorate Report Objective 1.3: Improve delivery of systems for in- Overall rating: Largely on Track. Development of national social registry is underway. Under the RCRF, processes clusive social services were initiated for training of Female Health Workers and their deployment to health facilities. Proficiency testing of nearly 3,000 teachers in four subjects was completed, and onboarding of teachers for RCRF financing of teacher salaries was completed in Puntland, Galmudug, Hirshabelle, and South West. However, the FY19 Inclusive Commu- nity Resilience and GBV Pilot experienced delays leading to grant closure before full disbursement, limiting results in providing GBV services. Indicator 1.3.1: Proportion of women of child- On track. Under the RCRF project, 886 FHWs have been selected, trained and are providing services in Puntland, bearing age (15-59 years) and children 0-59 Galmudug, BRA, Hirshabelle, Jubbaland and South-West. The first set of residential training for these FHWs kicked months referred to health facilities by Female off in early November 2021, the second tranche of training will occur until the end of September 2022. Around 67 Health Workers in selected federal member FHWs have left the program at different times for various reasons including pastoralist movement or change of states21 (percent): professions - these have and continue to be replaced. FHWs and female health supervisors (FHSs) are provided Target: increase by 10 (2022) 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 19 The processes for computing the indicator include: (i) registration, (ii) declaration/filing an assessment, (iii) taxpayer payment and accounting, and (iv) debt collection. 20 Baseline was to be collected upon project approval. 21 Baseline was to be measured once the project had been approved. 36 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Data Source: District Health Information Soft- community health systems and services. The proportion of pregnant women referred to health facilities by Female ware 2 (DHIS 2) and Health Management Infor- Health Workers in the five federal member states and Benadir in 2022 stands at 21.16%, as reported by digital mation System (HMIS) 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 Indicator 1.3.2: Gender Based Violence (GBV) sur- (15-59 years) and children 0-59 months referred to health facilities by Female Health Workers in the five federal vivors22 in selected communities in Garowe, Punt- member states and Benadir in 2022 stand at 48% and 50%, respectively. The number of women of reproductive land who report they receive complete case man- age visited by female health workers averages 10,956 and totals 65,738 in the five federal member states and the agement and psychosocial support services in line Benadir region. with international standards (percent) Baseline: 60 (2017) Target: 90 (2022) Off track. Prior to closure of the Inclusive Community Resilience and GBV Pilot, the IRC, through its partnership Data source: SGBV Project with KAALO Aid & Development (KAD), identified and engaged four female project focal points within Garowe IDP camps, who play a vital role in supporting survivors to access GBV services. KAD provided case management and 1.3.3 Teachers undergoing proficiency testing on referrals to 17 survivors of GBV and distributed 50 dignity kits to GBV survivors. However, no further results are literacy, numeracy and classroom pedagogy in se- expected due to formal closure of this Pilot in August 2020 largely due to delays and slow disbursement. lected federal member states (number): Baseline: 0 (2018) Target: 3,000 (2022) Data source: Ministry of Education Communiqué; Third Party verification reports On track. In 2019, the FGS MoECHE successfully undertook teacher proficiency testing (TPT) covering all federal member states except Puntland. Approximately 2,662 primary and secondary school teachers were tested in four Female Health Workers selected, trained and veri- subjects and pedagogy. In March 2020, FGS MoECHE rolled out TPT in Hirshabelle, Jubbaland, South West, and fied to provide basic health services in selected Galmudug. A total of 1,817 public and private primary and secondary teachers participated in this TPT. federal member states23 (number): Target: increase by 750 (2022) Data Source: District Health Information Soft- ware 2 (DHIS 2) On track. Under the RCRF project, 340 FHWs have been trained and are providing services in Puntland, Galmudug, Proportion of women and girls24 in Garowe, Punt- and BRA. An additional 529 new FHWs were selected in Puntland, Galmudug and BRA as well as Hirshabelle, Jub- land who participate in safe spaces activities25 and baland and South-West. Training and deployment of these FHWs to health facilities is expected in June-July 2021. know where to find GBV services (percent): Baseline: 0 (2018) 22 Vulnerable women and female youth selected as part of a pilot project 23 Baseline will be measured upon project approval 24 Selected as part of a pilot project of approximately 5,000 women 25 Safe space activities are activities where women’s groups and Community Based Organizations (CBOs) will develop and lead psyc hosocial and social integration activities for women and girls, including survivors of GBV 37 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Target: 70 (2022) Data Source: SGBV Project Off track. Prior to closure of the associated Inclusive Community Resilience and GBV Pilot, the IRC conducted ad- vocacy training for 130 women from different women groups/CSOs to build capacity of government and commu- nity-based actors to advance women’s social and economic empowerment programming and policy efforts sup- Developed national social registry (yes/no): porting women’s protection. IRC conducted assessments of five safe spaces, with three locations selected in Baseline: No (2018) Waberi, Tawakal IDP, and Sinujif villages in Garowe district. However, no additional results are expected under this Target: Yes (2022) indicator due to closure of the Pilot in August 2020. Data Source: Ministry of Labour and Social Af- fairs New government pay scale is linked to teacher On track. The development of the national social registry has been incorporated under the IDA-funded Shock- proficiency testing: (yes/no) responsive Safety Net for Human Capital Project. The project has successfully onboarded what? to support the Baseline: No (2018) development of the unified social registry. Target: Yes (2022) Data Source: Ministry of Education Communiqué; Third Party verification reports On track. FGS in collaboration with education stakeholders have begun work on developing teacher management and professional development policy which links pay scales and performance of teachers. Objective 1.4: Build the capacity of Somali mu- On track with some delay. The SURP-II was declared effective in February 2020 with the original closing date of nicipalities for urban resilience December 31, 2024. Additional Financing (AF) in the amount of US$41.5 million equivalent (US$20 million from IDA and US$21.5 million from the MPF) was approved by the World Bank Board of Directors on June 3, 2022. The AF was declared effective on July 14, 2022. With this, the SURP-II now has a total budget envelope of US$153.5 million with the new project closing date of December 31, 2026 Indicator 1.4.1: Beneficiaries26 are satisfied that Civil works commenced in Baidoa and Garowe in August and September 2021, and disbursement has picked up the rehabilitation of secondary urban roads met pace. In Kismayo, civil works began in February 2022, 8 months after contract signing. Two new cities of their needs in Mogadishu, Garowe, Kismayo and Beledweyne and Dhusamareb are undertaking needs assessment for priority urban investments. In response to Baidoa (number) the escalating drought crisis, the project activated the CERC in July 2022, reallocating US$20 million from Compo- Baseline: 0 (2018) nent 1 to help mitigate the impacts of rapid and large inflow of Internally Displaced Peoples (IDPs) on land and Target: 2,500 (2022) services in the three cities of Mogadishu, Baidoa, and Garowe that are experiencing a high inflow of drought in- Data Source: Somali Urban Resilience Project duced IDPs. monitoring reports and end of project survey On Track. More than 86 percent of project beneficiaries in Mogadishu and Garowe are satisfied with road invest- Of which are IDPs (percent) ments according to the SURP end line survey. Under SURP, both Mogadishu and Garowe have also benefitted IDPs Baseline: 0 (2018) by providing short-term income generation opportunities. 26 People or groups who directly derive benefits from improved roads in a WBG-assisted project. 38 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Target: 20 (2022) Data Source: Somali Urban Resilience Project monitoring reports and end of project survey Of which are host communities (percent) Baseline: 0 (2018) Target: 30 (2022) According to the SURP end line survey, on average 26 percent of those that benefitted from SURP employment Data Source: Somali Urban Resilience Project opportunities were IDPs. An estimated 19 percent of communities benefitting from the improved infrastructure monitoring reports and end of project survey were IDPs. Given the larger concentration of IDPs in Kismayo and Baidoa, this figure is likely to improve under SURP II. Indicator 1.4.2: People with access to improved SURP roads have benefitted a total of 221,000 people in the two cities of Mogadishu and Garowe, 81 percent of roads27 within a 500m range in Mogadishu, Ga- whom are from host communities. 74 percent of host community members benefitted from the short-term em- rowe, Kismayo and Baidoa (number): ployment opportunities generated under SURP. This figure is expected to increase under SURP-II. Baseline: 0 (2018) Target: 6,000 (2022) Data source: Somali Urban Resilience Project monitoring reports and end of project survey On track. Under the SURP, the number of people with access to an all-season road within the 500km range reached Of which are women (percent) 8,000 in Garowe and (preliminarily) 140,800 in Mogadishu. Roughly 50 percent of beneficiaries were female. In Baseline: 0 (2018) Garowe, 25 percent of beneficiaries were IDPs and 75 percent host communities. In Mogadishu, 12 percent of Target: 30 (2022) beneficiaries were IDPs and 88 percent host communities. Data Source: Somali Urban Resilience Project monitoring reports and end of project survey . Of which are IDPs (percent) Baseline: 0 (2018) Target: 20 (2022) Data Source: Somali Urban Resilience Project monitoring reports and end of project survey Of which are host communities (number) Baseline: 0 (2018) Target: 30 (2022) Data Source: Somali Urban Resilience Project monitoring reports and end of project survey 27 Improved roads are rehabilitated roads financed by a WBG-assisted project. 39 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Indicator 1.4.3: Person days of employment cre- ated in Mogadishu, Garowe, Kismayo and Baidoa (days) Baseline: 0 (2018) Target: 150,000 (2022) Data Source: Somali Urban Resilience Project monitoring reports and end of project survey On Track. The SURP has generated a total of 102,476 person-days of employment, benefitting approximately 1,600 people, of whom about 87 percent were male and 26 percent IDPs. Given Somalia’s security situation and the Of which are women (percent) socio-cultural environment, women are often reluctant to participate in manual labor. However, under SURP, Baseline: 0 (2018) women have participated in Mogadishu and Garowe (on average 12 percent). The project will likely achieve the Target: 30 (2022) target for youth as construction under SURP II evolves. Data Source Somali Urban Resilience Project monitoring reports and end of project survey Of which are youth (percent) Baseline: 0 (2018) Target: 30 (2022) Data Source: Somalia Urban Resilience Project monitoring reports and end of project survey Roads rehabilitated in Mogadishu, Garowe, Kis- mayo and Baidoa (km): Baseline: 0 (2018) Target: 30 (2022) Data Source: Somali Urban Resilience Project monitoring reports and end of project survey On Track. As of October 2021, 4.93 km of roads and 7.96 km of roads in Mogadishu had been rehabilitated under SURP. Under SURP-II, Baidoa will rehabilitate 13.5km of roads, drainage, and bridges; Kismayo 10km of roads and drainage; and Garowe 7.5km of roads, drainage, and bridges. Mogadishu is revisiting its priority investments to be financed under SURP-II. Focus Area 2: Restoring Economic Resilience and Opportunities 40 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Objective 2.1: Improve the business environment Overall rating. Largely On track. With support of the SCORE project and IFC, gains were made in adopting laws and and lowering barriers to entry regulations to improve the business environment and providing grants to SMEs. For Somaliland, authorities com- pleted drafting of the Companies Act, Islamic Financial Institutions Act, Central Bank Act, AML/CFT Act, Remittances Act, and Payment Systems Act. In 2019, the Somaliland Parliament approved the AML/CFT Law and Remittance Law. At the Central Bank of Somalia (in Mogadishu), authorities completed drafting of the Financial Institutions Law, Payment Systems Law, and Insurance Law. In July 2019, the CBS approved Mobile Money Regulations, which will improve oversight of mobile money service providers. In December 2019, the Company Law was signed into law by the FGS President. A new business registry system (BRS) with limited functionality was launched by MOCI in April 2019 for FGS with support of SCORE and IFC. Follow on support under SCALED-UP is supporting a launch of the full scope of BRS functionality. A pilot phase of the rollout of full BRS functionality was already implemented in Mogadishu, with the submission of 1,400 applications through the system and the registration and issuance of licenses to 364 businesses (as of June 15, 2021). A new online business registry system (BRS) was launched in Mogadishu with strong initial results and expansion of the BRS to other FMS later in 2021. Indicator 2.1.1: Increased private sector invest- Largely on track. Under the SCORE project, the Somali Business Catalytic Fund (SBCF), a matching grant scheme ment in key economic sectors such as energy, live- supporting SME investments, helped mobilized US$6.5m in private capital and create 2,217 jobs in enterprises. The stock, fisheries and agriculture (US$, million) SBCF closed in January 2019. With follow on support under the SCALED-UP and the MSME financing facility Gar- Baseline: 0 (2017) gaara Company Limited, Somalia is working to further increase private sector investment. IFC’s SUSIP has provided Target: 30 (2022) inputs into Somalia’s draft National Investment Promotion Strategy. At the sector level, the SUSIP has worked up- Data source: IFC Project Completion Reports/So- stream in the telecom sector to improve interoperability of interconnection regulations, which are critical to cre- malia Investment Promotion Agency/CBS ating an efficient, open, and transparent market attractive to investment. 2.1.2: Businesses and investment licensing regis- On track. In April 2019, the Minister of Commerce and Industry (MOCI) with support of SCORE and IFC’s Somalia tered and operational under One Stop Shop ICRP2 launched the business registry system in Mogadishu—though with limited functionality as the Company Law FGS had not been enacted at the time. Since the Company Law was signed by the FGS president in December 2019, Baseline: 0 (2018) work has reactivated to fully rollout Business Registration Services (BRS) under SCALED-UP. Company Law Regula- Target: 400 (2022) tions were adopted in March 2021. Supported by SCALED-UP, a registration pilot was also launched using a simpli- Data Source: IFC Project Completion Reports/So- fied process (e.g., more transparent and efficient digital registration and licensing processes). Following the pilot, malia Investment Promotion Agency full launch took place in Mogadishu in March 2022. MOCI is working to fully integrate online payment to the system and rollout the system in the Federal Member States. Somaliland Baseline: 0 (2018) Target: 200 (2022) Data Source: IFC Project Completion Reports/So- malia Investment Promotion Agency Business registry operational (yes/no): 41 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) FGS On track. The business registry is operable with limited functionality in Mogadishu, as explained immediately Baseline: No (2018) above. Target: Yes (2022) Data source: Ministry of Commerce and Industry and SCORE Project document Somaliland Partly on track. Under SCORE, the vendor contracted to deliver the business registry in Somaliland was unable to Baseline: No (2018) deliver the technical system. This component of SCORE closed. However, IFC’s ICRP2 has continued work on the Target: Yes (2022) Somaliland registry. Officials with support of the ICRP2 have completed design for the Hargeisa electronic business Data source: Ministry of Commerce and Industry registry, including a systems specification report and terms of reference as well as an RFP for procurement of the and SCORE Project document online registration system. Payment switch and automated transfer system On track. Under SCORE, vendor contracts were signed in 2019 to support the three components of the payment ATS) operational (yes/no) system: a) primary and secondary telecommunication networks and the modular data center (ITI Project); b) Au- Baseline: No (2018) tomated Transfer System (ATS), and c) Payment Switch. In March 2021, the modular data center was deployed, Target: Yes (2022) and a cloud computing hosting solution for the Somalia Transaction and Reporting System (STARS) established, Data source: SCORE completion report which consists of the ATS and an Automated Clearing House (ACH). STARS went live in July 2021. System integration testing efforts on the Somalia Payment Switch (SPS) are underway. The work on related governance instruments (i.e., National Payment Systems Law, Financial Institutions Law, Insurance Law) is in the final stages, but delayed due to the current political impasse. CBS core-banking system functional and linked to On track. The core-banking system is live and operational at the CBS. The system has been integrated to the SFMIS branches and state banks in Federal Member system in the Office of the Accountant General through the SCORE project, with follow-up support under SCALED- States (yes/no) UP. Support for business continuity of government services and digital payments in the context of COVID-19 (e.g., Baseline: No (2018) through integration of systems – hardware and software, business process reengineering, training related to the Target: Yes (2022) digitization of selected government revenue and expenditure streams and associated workflows) will be supported Data source: SCORE completion report through recently approved additional financing under SCALED-UP. Objective 2.2: Access to finance to increase inclu- Overall rating. Largely On Track. The SCALED-UP, which became effective in 2019, has laid the groundwork for sion and digital development opportunities increasing support and loans to MSMEs, complementing activities of the preceding SCORE project. The FGS has adopted a Digital ID Policy, with a view to increasing transaction accounts opened with unique digital IDs. Progress is being made toward issuance of licenses for telecom operators. The WBG is supporting increased access to finance through an MSME Financing Facility operated by Gargaara Company Limited. 42 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Indicator 2.2.1: Loans advanced by participating On track. With support of SCALED-UP, Somalia established in April 2019 Gargaara Company Limited, an apex de- financial institutions in key economic sectors; e.g. velopment finance institution that is implementing a facility financing MSMEs, thus advancing loans in key sectors. energy, fisheries, livestock, agriculture28 (US$ mil- This facility was initially funded with US$15 million and will soon receive US$25 million in additional financing which lions): was approved to support COVID-19 response and recovery. The MoF appointed the Gargaara Board of Directors, Baseline: 0 (2018) which has selected a management team in accordance with World Bank Procurement Regulations. As of June 2020, Target: 15 (2022) three Participating Financial Institutions had been onboarded to participate in the MSME Financing Facility, and Data source: World Bank SCALED-UP project in- Gargaara had commenced lending to MSMEs. Gargaara is in discussions with seven additional potential PFIs to be formation system potentially onboarded. Work under SCALED-UP complements good progress under the under the SCORE project, notably the Somali Business Catalytic Fund (SBCF), which, as noted above, has mobilized private financing Of which women owned MSMEs reached (per- (US$6.5m) and created jobs (2,217) at closure in January 2019. As of June 2022, Gargaara has disbursed a total of cent) US$4.1 million to 169 MSMEs across the 3 onboarded PFIs. Baseline: 0 (2018) Target: 30 (2022) Data source: World Bank SCALED-UP project in- formation system Of youth owned MSMEs reached (percent) Baseline: 0 (2018) Target: 10 (2022) Data source: World Bank SCALED-UP project document Indicator 2.2.2: Proportion of selected women Off track. Activities of the Community Resilience and GBV Pilot project were launched in mid-2019, but due to with increased access to financial resources after delays and closure of the pilot, an assessment of women’s increased access to financial resources is not feasible. participating in Village Savings and Loan Associa- tion Groups in Garowe29 (percent) Baseline: 60 (2017) Target: 80 (2022) Data source: Village Savings and Loan Associa- tion (VSLA) Management Information System Indicator 2.2.3: Active transactional accounts30 opened with unique digital ID, including mobile Partly on track. The FGS adopted a Digital ID policy in April 2019. The ID Authority (i.e., Somali People’s Registration money (number, million): and Identification Agency – DADSOM) was formally established by a bill passed in Parliament and signed by the 28 Indicator is specific to World Bank Group-assisted project 29 Part of GBV pilot project, if successful, will be scalable. 30 Transaction accounts are financial products for receiving funds, keeping funds for safe keeping or savings, as well as making payments. 43 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Baseline: 0 (2018) President in December 2020, which sets out the agency’s mandate, objectives, powers, operational focus areas, Target: 1 (2022) and budget, and the requirements and responsibilities of its General Manager and Deputy General Manager. DAD- Data source: CBS SOM has already been provided with a budget, and its General Manager appointed. Work on internal policies and regulations (e.g., financial management and recruitment) is ongoing and DADSOM has initiated consultations on the ID system with FMS. A consulting firm was onboarded in February 2021 to support the design of a fully inclusive outreach and enrollment strategy for the digital ID system. The drafting of the remaining enabling legislation and the planning, procurement, and deployment of the system’s technical infrastructure and technical capacity have not yet been initiated. Furthermore, as the scope of the Government of Pakistan’s engagement in supporting the digital ID infrastructure is yet to be determined, US$15 million in additional financing was recently approved to fund the ID system’s technical infrastructure, including components related to enrollment, secure identity man- agement, credential issuance, and digital authentication. Indicator 2.2.4: Licenses and authorizations issued by the National Communications Authority for tel- On track. As of July 2020, the NCA Board of Directors approved the main licensing category under the new Unified ecommunication services (number): Licensing Framework, a communications infrastructure and services provider (CISP) license. Five of the six main Baseline: 0 (2018) incumbent operators have been issued CISP licenses under Somalia’s new Unified Licensing Framework. These Target: 5 (2022) developments have been catalytic for regulatory progress on the mobile money side, where Hormuud’s CISP li- Data source: National Communications Authority cense allowed it to subsequently obtain Somalia’s first mobile money license in March 2021 . Final terms and con- Database ditions for the two remaining licensing categories under the Universal Licensing Framework (ULF) — Communica- tions Infrastructure Provider (CIP) and Application and Services Provider (ASP)—were approved by the NCA’s Board in May, following the conclusion of public consultations. The NCA is expecting to issue between 6-10 licenses to existing providers, including to two landing station operators and several internet service providers. New financial products (e.g. leasing finance, SME banking, agri-financing) launched (number): Largely on track. This indicator is affiliated with IFC support. Products will be defined when IFC’s market scoping Baseline: 0 (2018) deep dives and diagnostics of financial institutions are completed. Diagnostic reports will provide insights on the Target: 3 (2022) needs and types of new products to be developed. Data source: IFC Project Supervision Reports/ Project Completion Report Women SME beneficiaries of new financial prod- ucts and services (number) Largely on track. This indicator is affiliated with IFC support. The gender indicators will be part of new products Baseline: 0 (2018) that IFC will design based on the Financial Institutions Diagnostic. Target: 50 (2022) Data source: IFC Project Supervision Reports/ Project Completion Report/Gargaara Company Limited MIS Off track. Prior to closure of the Inclusive Community Resilience and GBV Pilot, IRC conducted Training of Trainers (TOTs) for Village Saving & Loans Associations (VSLAs). IRC conducted mobilization activities in the three target 44 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Proportion of selected women trained on business locations and established six VSLA groups. Each group consisted of 20 persons for a total of 120 women. All 120 skills demonstrate basic financial and business women were trained on key aspects of the VSLA, including mobilizing savings; accessing loans for investments and skills in Garowe31 (percent): other needs; and creating a social fund for relief of members experiencing emergencies. Baseline: 0 (2018) Target: 80 (2022) Data source: Gargaara Company Limited Man- agement Information System On track given good foundational work on Digital ID Policy (see explanation under Indicator 2.2.3 above). Individuals registered using SIM card registration and/or digital ID (number, million) Baseline: 0 (2018) Target: 1 (2022) Data source: National Com. Authority Objective 2.3: Increase access to renewable en- Partly on track. Under the FY19 Somali Electricity Access Project (SEAP), a master plan for the power sector was ergy completed. The Government (FGS and SL) completed procurement of a Grants Manager to coordinate grants for standalone Solar Home Systems (SHS). Under this project, some funding was directed to provide emergency SHS to households affected by flooding. The SEAP is on track to meet the CPF target on access to electricity services, though is expected to undershoot the target on generation capacity due to an overambitious target. The project may experience some delays due to problems importing and distributing SHS products in the pandemic period. Indicator 2.3.1: Proportion of people provided On track. At the FGS level, 11 of 36 solar service providers have qualified to receive Results Based Grants (RBFs). with new or improved electricity services (house- In Somaliland, 12 of 26 solar service providers qualified to receive RBFs to expand operations into underserved holds) areas. The project targeted 21500 households, which has already been exceeded by results from Federal Govern- Baseline: 0 (2018) ment of Somalia and Somaliland. A total of 6430 households reached through emergency solar kits distribution in Target: 28,750 (2022) flood affected areas; and additional 20,388 households were reached by 11 solar service providers in FGS by the Data source: MTF Survey end of July 2022, following awarding of RBF. This has enabled 151,718 people to be reached with off grid power. In Somaliland 12 solar service providers will also reach additional 21,000 households. However, sales are ongoing, Indicator 2.3.2: Generation capacity of energy and the results will be updated once verified through independent verification process. The team is tracking sales constructed or rehabilitated (including renewable energy): (percent) Partly on track. The project targets 0.2MW (200kW). About 73,110 watts installed power were realized by 11 so- Baseline: 0 (2018) lar service providers in FGS; and tracking is going on for Somaliland solar service providers. These figures will be Target: 30 (2022) updated upon completion of verification by the next mission in October 2022. Data source: MFT Survey 31 Part of GBV pilot project; if successful, will be scalable. 45 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Power sector master plan 32 completed and dis- Achieved. The master plan and city development plans were completed in 2018, and formally disseminated in seminated (percent): May 2019. Baseline: No (2018) Target: Yes (2022) Data source: Somali Electricity Access Project monitoring reports Private sector debt capital mobilized for solar Off track. No private sector debt capital has been mobilized for solar home systems. However, the Somalia Elec- home systems distributors (US$ million)33: tricity Access Project has provided results-based grants for market development activities to lower the opportunity Baseline: 0 (2018) cost of expanding access to SHS in underserved areas of Somalia. Target: 2.35 (2022) Data source: Somali Electricity Access Project Survey Objective 2.4: Increase access to water through Partly on track. After the Water for Agro-pastoral Productivity and Resilience “Biyoole” project (P167826) approval, rural resilience and productivity the CPF targets are partly on track to be accomplished by 2023. The project has made good progress on site selec- tion and engineering studies and designs. The construction of key water points, Ministry buildings, and rangelands rehabilitation infrastructure has commenced. Community engagement guidelines have been completed. Veteri- nary clinics (including mobile clinics) are being set up in Puntland, and trainings in fodder production including guidelines and production material are expected soon. All Project Implementation Units are fully functioning, with all vehicles delivered, offices furnished and equipped, and full staffing completed. Safeguards challenges in recent months have caused implementation delays with unanticipated additional resources needed for ESMP preparation and security management. Indicator 2.4.1 - People in rural areas provided Partly on track. Progress had been steady on intermediary steps contributing to this indicator, though challenges with access to improved water sources for multi- with preparation of safeguards instruments resulted in some delays. Twenty water point sites were selected in ple uses: domestic, livestock and horticulture Puntland, five in Galmudug, and five in South West States. Eighteen Construction Investment Reports were deliv- (number) ered. Safeguards instruments were developed and institutionalized and the first civil works started in Puntland. Baseline: 1,300,000 (2017)34 However, findings from development of safeguards instruments highlighted weak capacity for safeguards imple- Target: 1,550,000 people (2022) mentation resulting in extended delays. Unexpected security management plans requirements in South West State Data source: WHO/UNICEF JMP (2017), High and Galmudug prevented civil works from starting in those two states. Backstopping engineering support was con- Frequency Household and Project Surveys tracted, and additional work orders processed to support ESMP preparation and capacity building. Procurement for security assessments and management plan development is underway. 32 The master plan will guide the introduction and establishment of modern cost-effective reliable electricity supply systems over a twenty-year planning period. 33 Indicator is specific to a WBG-assisted project. 34 In 2017 an estimated 20 percent of rural households had access to basic water services. Source: WHO/UNICEF JMP (2017) 46 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Of which are women (number): Baseline: 700,000 (2017)35 Target: 840,000 (2022) Data source: WHO/UNICEF JMP (2017), High Frequency Household and Project Surveys Indicator 2.4.2 - Producers reached with agricul- Partly on track. The delay in commencing construction of water points caused this activity to be slightly behind tural assets or services and producers (number): schedule. However, preparatory work in development of community engagement guidelines and community in- Target: increase by 250,000 (2022) vestment plans represent foundations for agricultural services. Data source: Project databases Of which are women (number) Target: increase by 125,000 (2022) Data source: Project databases Indicator 2.4.3: Rangelands managed by commu- nities (hectares): Largely on track. Rehabilitation processes for rangelands have started in four sites in Puntland. Target: increase by 100,000 (2022) Data source: Project databases; SWALIM Indicator 2.4.4: Land brought under catchment management systems (hectares): Largely on track. This activity is closely associated with rangelands rehabilitation and community investment plan- Target: increase by 5000 (2022) ning. Experience from the initial work in Puntland is guiding implementation across the project with foundational Data source: Project databases; SWALIM activity underway in new sites in Puntland as well as Galmudug and South West States. Communities across Somalia supported in partici- patory planning, research/extension and manage- Largely on track. Community engagement processes have been completed for ten communities in Puntland, four ment of natural resources (number) in South West State, and four in Galmudug. Ten Community Investment Plans are under development in Puntland. Target: increase by 100 (2022) Significant gains are expected on this indicator through 2022. Data source: Water Project database Operational water user associations created and/or strengthened[3] (number) in selected areas: Target: increase by 100 (2022) 35 There are likely to be higher numbers of women than men that benefit as men spend more time on the move with livestock [3] Project is specific to World Bank-assisted project 47 CPF Objective and Indicators Summary of Progress (CPF Indicators=Plain text; Supplementary= Italics) (Achieved/On Track/Partly on Track/Off Track) Data source: Project databases Largely on track. Eighteen Water User Associations have been established in first sites in Puntland, Galmudug and South West State. This supplementary indicator will be dropped in the revised CPF matrix. Significant gains are expected on this indicator through 2022. Community water points constructed or rehabili- tated allowing livestock to access water for 10 months or more per year (number): Baseline: 1200 (2014) Partly on track. Rehabilitation work has commenced in Puntland and rehabilitation sites have been selected in Target: 1300 (2022) Galmudug and Southwest State. Backstopping engineering contacted. Data source: SWALIM[4] and project databases Producers adopting improved agricultural (crop- ping and livestock) technology (number): Target: increase by 100,000 (2022) Data source: Project databases On track. Veterinary services for livestock are being supplied across Puntland and the construction or rehabilitation of four district clinics are underway. Mobile veterinary clinics are operational in Puntland and under procurement in South West State and Galmudug. [4] Analysis of SWALIM data selecting for water points that were i) functional ii) permanent iii) community owned 48 ANNEX 4. HIPC COMPLETION POINT TRIGGERS FOR SOMALIA 1. Somalia has made steady progress toward reaching the HIPC Completion Point (CP) (the point at which a country receives irrevocable debt relief), despite facing the challenging environment of the multiple crises of COVID-19, drought and floods, and locust infestation. The FGS revised its 2020 budget in August 2020 to support a coordinated national response to the triple crisis without vio- lating commitments to avoid a cash deficit, accumulation of domestic arrears, or new debt. Spend- ing priorities in the revised 2020 and 2021 budgets were aligned to the NDP9, which serves as Somalia’s poverty reduction strategy under the HIPC Initiative. Although Somalia faces no deadline for reaching the HIPC Completion Point, IMF and World Bank staff continue to hold a baseline as- sumption that it is feasible for it to reach the Completion Point by March 2023, three years after reaching the Decision Point. Table 4A.1 shows the Completion Point triggers agreed to with the Somali authorities Table 4A.1 HIPC Completion Point triggers agreed to with the Somali authorities Area Trigger Public financial and expenditure • Publish at least two years of the audited financial accounts of the Federal management Government of Somalia. • Issue regulations to implement the provisions of the Public Financial Management Act on debt, public investment, and natural resource reve- nue management. Domestic revenue mobilization • Adopt and apply a single import duty tariff schedule at all ports in the FSG (to also foster greater trade integration). Governance, anti-corruption, and • Enact the Extractive Industry Income Tax (EIIT) Law. natural resource management • Ratify the United Nations Convention against Corruption (UNCAC). Debt management • Publish at least four consecutive quarterly reports outlining the outstand- ing stock of general government debt; monthly debt-service projections for 12-months ahead; annual principal payment projections (for at least the next five years); and key portfolio risk indicators (including the pro- portion of debt falling due in the next 12 months; the proportion of varia- ble-rate debt; and the projected ratios of debt service to revenues and debt service to exports for the next five years). Social sectors • Establish a national unified social registry as a functional platform that supports the registration of citizens and the determination of their eligi- bility for social programs. • Ensure that FGS and FMS ministers of education adopt an agreement de- fining their respective roles and responsibilities on curriculum and exami- nations. • Ensure that FGS and FMS ministers of health adopt a joint national health sector strategy. Growth/structural • Enact the Electricity Act and issue supporting regulations to facilitate pri- vate sector investment in the energy sector. • Issue Company Act implementing regulations on minority shareholder protection, to encourage private sector investment Statistical capacity • Publish at least two editions of the Somalia Annual Fact Book. 49 ANNEX 5. PLANNED VERSUS ACTUAL LENDING TO SOMALIA, FY19–22 Table A5.1 Planned versus actual lending to Somalia, FY19–22 Planned commitment Actual Commitment IDA IDA CRW / Focus Area MPF PACG FY MPF PACG IDA TAR regional Trust fund CPF Focus Area 1: Strengthening Institutions to Deliver Services Somalia Reengagement and Reform Development Policy Financing (P171570) 20 45.0 Somalia Re-engagement and Reform Supplemental Development Policy Financing (P174064) 20 55.0 Domestic Revenue Mobilization and Public Financial Management Capacity Strengthening Project (P166206) 10.0 20.0 19 10.0 20.0 Somalia Recurrent Cost and Reform Financing Project, Phase II (P154875) 60.0 60.0 19 2.0 60.0 Somalia Recurrent Cost and Reform Financing Project, Phase III (P173731) 20 68.0 Somalia Capacity Injection (P149971) 10.0 20 8.0 Somali Integrated Statistics and Economic Planning Capacity Building (P171160) 20 25.0 Somalia Urban Resilience Project (P163857) 6.0 19 9.0 Somalia Urban Resilience Project II (P170922) 64.0 20 62.0 50.0 Improving Healthcare Services in Somalia Project (Damal Caafimaad) (P172031) 21 75.0 25.0 Somalia Education for Human Capital Development Project (P172434) 21 40.0 Shock Responsive Safety Net for Human Capital Project (Baxnaano) (P171346) 20 65.0 Shock Responsive Safety Net for Human Capital Project Additional Financing (P176368) 21 110.0 CPF Focus Area 2: Restoring Economic Resilience and Opportunities Somalia Capacity Advancement, Livelihoods and Entrepreneurship, through Digital Uplift Project (SCALED-UP) 10.0 20.0 19 13.0 18.0 (P168115) Somalia Capacity Advancement, Livelihoods and Entrepreneurship, through Digital Uplift Project (SCALED-UP) 21 20.0 50.0 Additional Financing (P174769) Somali Electricity Access Project (P165497) 5.5 19 5.8 Somalia - Water for Agro-pastoral Productivity and Resilience (Biyoole) (P177627) 40.0 19 42.0 Somalia Crisis Recovery Project (P173315) 20 62.0 75.0 Additional Financing to the Somalia Crisis Recovery Project (P176343) 21 50.0 Shock Responsive Safety Net for Locust Response Project (P174065) 20 40.0 Shock Responsive Safety Net for Locust Response Project Additional Financing (P176369) 21 25.0 50.0 50 Total 165.5 140.0 129.8 255.0 555.0 215.0 25.0 51 ANNEX 6. SELECTED ECONOMIC AND FINANCIAL INDICATORS FOR SOMALIA, 2018–23 Table A6.1 Macro poverty outlook indicators (percent of GDP unless indicated otherwise)a 52 ANNEX 7. TRANSITION FROM MULTI-PARTNER FUND TO IDA LENDING IN SOMALIA 1. Somalia has undergone a dramatic transition from World Bank-supported projects financed solely by the MPF to projects financed jointly by the MPF and IDA to projects financed solely by IDA. The average project size increased from US$19.4 million in FY18 to US$80.6 million in FY22 (Figure A8.1). Figure A7.1 Somalia’s integrated MPF/IDA portfolio, FY15–23 SOMALIA MPF/IDA INTEGRATED PORTFOLIO 25 100 90 86 20 4 80 81 80 70 4 5 62 15 60 60 # of operations US$ million 4 4 50 14 3 10 40 5 9 1 7 0 0 0 30 15 30 5 0 19 20 8 8 8 8 13 7 5 10 10 5 5 10 4 5 2 0 0 0 0 0 0 0 0 0 1 0 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Axis Title # of MPF Only # of IDA Only # of Co-Financed # of Regional Average Size of Operation 53 ANNEX 8. PLANNED VERSUS ACTUAL ADVISORY SERVICES AND ANALYTICS PROVIDED TO SOMALIA, FY19–FY22 Table A8.1 Planned versus actual Advisory Services and Analytics provided to Somalia, FY19–FY22 Type of ASA Status ASA planned in the Country Partnership Framework Public-private infrastructure advisory facility work on PPP frame- work Macroeconomic planning and statistics (including poverty analy- Somali High Frequency Poverty Monitoring (P164306), sis, public expenditure reviews and support to the I-PRSP) approved in FY18, competed in FY21 Somalia Economic Update (P175024), approved in FY21, active Somalia Financial Governance Policy Support (P175711), approved in FY21, active Somalia Country Economic Memorandum (P175062), approved and completed in FY21 Health and education sector knowledge work Somalia Economic Update 4: Building Education to Boost Human Capital (P168325), approved and com- pleted FY19 Engagement in Somalia's Health Sector ASA (P167976), approved in FY19, active Somalia’s Investment Case to strengthen health service delivery (P173177), approved in FY20, active Customs reform technical support to the financial governance Somalia Customs Support (P172650), approved in FY20, committee active PFM advisory support to the security sector (P163791) Completed in FY21 Urbanization review (P167763) Completed in FY20 Social protection analytical and advisory work Somalia Social Protection Support: Building Blocks To- wards a National Social Protection System (P168945), approved in FY19, active Somali Socio-Economic Monitoring (P170762), ap- proved in FY19, active Somalia Petroleum Technical Assistance Project (P164175) Completed in FY21 IFC Financial Institutions Development Project Somalia Country Environmental Analysis (P161994) Completed in FY20 Roadmap for Resilience and Growth of Somalia's Livestock Sec- tor Somali Resilient Multiple Use Water Services Somalia Economics of Water (P174994), approved in FY21, completed in FY22 54 CHOICES Evaluation (Interventions for Young Adolescents and Approved in FY19, ongoing Their Parents to Transform Gender Norms in Somalia [Impact]) Evaluation Somalia Investment Climate Reform Program II New ASA not planned in the Country Partnership Framework Somalia Livestock Insurance (P169836) Approved in FY19, completed in FY20 Support to a Transboundary Water Resources Management Approved FY19, active (P1677749) Somalia : Enhancing Governance Dialogue (P171974) Approved in FY20, active Support to Somalia Recovery and Resilience (P174724) Approved in FY21, active Somalia Women's Empowerment Platform (P175129) Approved in FY21, active Somalia: National Trade Strategy and Diagnostic Support for Approved in FY21, completed in FY22 WTO Accession (P175939) Somalia Climate Risk Assessment (P176246) Approved in FY21, active Implementation Support: Regulatory Framework for Mobile Approved and completed in FY21 Money in Somalia (P171387) Input to Somalia National Trade Strategy (P168088) Approved FY19, completed FY22 Somalia Climate Risk Assessment (P17624) Approved FY22, active Somalia ESF and Security Management Capacity Building Approved FY22, active (P176672) 55 ANNEX 9. MAPPING OF REVISED COUNTRY PARTNERSHIP FRAMEWORK TO SOMALIA’S NINTH NATIONAL DEVELOPMENT PLAN AND THE SUSTAINABLE DEVELOPMENT GOALS Figure A9.1 Mapping of revised Country Partnership Framework to Somalia’s Ninth National Development Plan and the Sustainable Development Goals 56 ANNEX 10. THE WORLD BANK GROUP’S ACTIVE PORTFOLIO IN SOMALIA Table A10.1 World Bank active portfolio as 15 September 2022 Latest Net Commitments No. Project ID Project Name Prod. DO IP Overal Bank Closing Date Total IDA Others Cumulative Undisbursed % Age Line l Risk Approval Disbursements Balance Undisbursed (Months) 1 P149971 Somalia Capacity Injection RE MS MS S 11-Aug-2015 31-Dec-2022 $36.42M $0.00M $36.42M $30.74M $5.68M 15.6% 84.9 2 P151492 Second Public Financial Management Capacity RE S S S 07-Jul-2015 30-Jun-2023 $50.00M $20.00M $30.00M $43.78M $5.86M 11.8% 86.1 Strengthening Project 3 P155123 Somaliland Civil Service Strengthening Project RE S S S 30-Jun-2016 30-Dec-2022 $10.00M $0.00M $10.00M $8.59M $1.41M 14.1% 74.3 4 P158235 Supporting remittance flows to Somalia RE 14-Jan-2016 $3.13M $0.00M $0.00M 79.8 5 P165497 Somali Electricity Access Project RE MS MS S 21-Dec-2018 30-Jun-2023 $7.20M $0.00M $7.20M $5.85M $1.35M 18.7% 44.5 6 P167826 Somalia - Water for Agro-pastoral Productivity and PE MS MS S 01-Jul-2019 28-Feb-2023 $42.00M $42.00M $0.00M $20.02M $20.68M 50.8% 38.2 Resilience 7 P168115 Somalia Capacity Advancement, Livelihoods and PE MS MS S 07-Mar-2019 31-Dec-2025 $101.00M $68.00M $33.00M $10.43M $54.98M 84.1% 42.0 Entrepreneurship, through Digital Uplift Project (SCALED-UP) 8 P170922 Somalia Urban Resilience Project II PE S MS H 09-Dec-2019 31-Dec-2026 $153.50M $70.00M $83.50M $6.16M $61.63M 90.9% 32.9 9 P171160 Somali Integrated Statistics and Economic Planning PE S S S 30-Jun-2020 31-Aug-2025 $25.00M $25.00M $0.00M $7.96M $16.22M 67.1% 26.2 Capacity Building 10 P171346 Shock Responsive Safety Net for Human Capital PE S S S 08-Aug-2019 31-Dec-2024 $318.00M $318.00M $0.00M $88.17M $219.90M 71.4% 37.0 Project 11 P172031 Improving Healthcare Services in Somalia Project PE MS MS S 28-Jun-2021 30-May-2025 $100.00M $75.00M $25.00M $0.40M $68.78M 99.4% 14.3 (“Damal Caafimaad”) 12 P172434 Somalia Education for Human Capital Development PE S S S 16-Jun-2021 30-Jun-2026 $40.00M $40.00M $0.00M $0.50M $36.23M 98.6% 14.7 Project 13 P173088 Somali Electricity Sector Recovery Project PE S S S 08-Dec-2021 31-Dec-2026 $150.00M $150.00M $0.00M $0.50M $141.82M 99.6% 8.9 14 P173315 Somalia Crisis Recovery Project PE MS MS H 15-May-2020 31-May-2025 $187.50M $187.50M $0.00M $55.01M $129.39M 70.2% 27.7 15 P173731 Somalia Recurrent Cost & Reform Financing Project - PE MS S H 11-Jun-2020 31-Dec-2025 $130.00M $130.00M $0.00M $43.31M $85.79M 66.4% 26.9 Phase 3 16 P174065 Shock Responsive Safety Net for Locust Response PE S S S 29-Jun-2020 25-May-2023 $115.00M $115.00M $0.00M $55.09M $58.48M 51.5% 26.3 Project 17 P174875 Somaliland Civil Service Strengthening Project II RE S 26-Jan-2022 31-Dec-2023 $4.85M $0.00M $4.85M $0.50M $4.35M 89.7% 7.3 18 P174889 Somalia Inclusive Growth DPO Series PE H 27-Jul-2022 31-Jan-2024 $100.00M $100.00M $0.00M $97.66M $0.00M 0.0% 1.3 19 P176898 Somalia Empowering Women through Education and PE S 27-Jun-2022 30-Jun-2027 $25.00M $25.00M $0.00M $0.00M $24.86M 100.0% 2.3 Skills Project - "Rajo Kaaba" 20 P176956 Somalia COVID-19 Emergency Vaccination Project PE S S S 28-Sep-2021 31-Dec-2025 $65.00M $65.00M $0.00M $0.00M $62.95M 100.0% 11.3 TOTAL $1,663.60M $1,430.50M $229.97M $474.66M $1,000.34M 67.8 % 57 58 ANNEX 11. GEOGRAPHIC ALLOCATION OF WORLD BANK LENDING PROJECTS IN SOMALIA Table A11.1 Geographic distribution of World Bank lending projects Geographic distri- Project Nature of project System for allocation bution Recurrent Costs and Re- Recurrent costs, transfers to FMS National but not • “Readiness criteria” define entry into the pro- form Financing Projects for basic services; RCRF also pro- including Somali- gram (linked to basic PFM capacities) II and III vides TA to convene FMS and FGS land (yet) • Performance-based conditions link resources through the Finance Ministers Fis- to improved dialogue between FGS and FMS cal Forum • Somali-led annual review process manages al- location process • Finance Ministers Fiscal Forum meeting in- creasingly frequently to review resource shar- ing and strategic policy issues Development Policy Op- Budget support into the FGS National • Depends on FGS budget allocation for inter- erations budget governmental transfers PFM/DRM Sector Sup- TA for PFM systems • FGS, Puntland, and Division of labor with UK– and EU–financed port Somaliland PREMIS program, which supports PFM TA in southern FMS Capacity Injection Pro- Capacity injection FGS, Puntland and • Based on access constraints; CIP scheme is ject (P149971) Somaliland (Civil phasing out and mainstreaming into budgets Service Strength- ening Project - (P155123)) SCALED UP SME financing through Gargaara National, including • Access to Gargaara line of credit is not limited apex facility and TA to Central Bank Somaliland for SME geographically of Somalia, the National Communi- financing; TA is at • Private sector can apply cations Authority, and the ID au- FGS level thority SURP I and II Urban infrastructure through mu- Mogadishu, Ga- • Methodology for allocations developed by nicipalities rowe, Baidoa, and task team based on vulnerability index of cit- Kismayo ies, taking into account number of IDPs, pov- erty, population, and access/security Water for Agro-Pastoral Local-level water infrastructure Somaliland, Punt- • PDO–driven, focus on arid lands, therefore Resilience and Produc- land, Galmudug, northern in nature tivity (Biyoole) and South West • Southern expansion based on site identifica- tion and viability and access/security Shock Responsive Safety nets, delivered via govern- • National, including Methodology for district selection developed Safety Nets for Human ment–UN partnership Somaliland by task team and World Food Programme Capital Development with the Ministry of Labour and Social Affairs, based on indicators of nutrition, poverty, and access/security Crisis Recovery Project Area-based, multisector infrastruc- • Hirshabelle, Jubba- Targeting based on Flood Impact Needs As- ture and livelihoods land, South West, sessment and locust mapping and FGS • TA at FGS level Health project under Essential Package for Health Ser- To be determined• Task team developing methodology for tar- preparation vices financing geting based on access, partner coverage, and poverty 59 ANNEX 12. IFC PORTFOLIO IN SOMALIA Table A12.1 IFC portfolio in Somalia, as of May 16, 2022 Project Nature of project Geographic distribution Somalia Investment Climate Reform Project Aims to expand and strengthen the private National, including Somaliland 2 (SICRP2) sector through targeted legal and regula- tory improvements. Somalia Unlocking Sectoral Investment Pro- Seeks to facilitate growth and private in- National, including Somaliland gram (SUSIP) vestment in Somalia by addressing priori- tized legal, institutional, and regulatory constraints in the ICT and energy sectors. Somalia Financial Institutions Development Aims to expand market knowledge, diag- National, including Somaliland Program (FIDEP) nose financial market infrastructure gaps, and raise awareness of best practices in So- mali financial institutions. Kaah International Microfinance Somalia Builds institutional capacity of KIMS Micro- National; client-level engagement (KIMS) finance by assisting it in implementing its five-year plan. Somalia Investment Academy Builds institutional capacity of investment- National but not including Somali- focused government agencies, private sec- land tor participants, and professional advisors in Somalia. Somalia PPP Creates foundation for public-private part- National but not including Somali- nerships, particularly in development of in- land at the moment frastructure projects. Note: All services are advisory; there is hence no allocation to the client. 60