EASTERN AFRICA REGIONAL DIGITAL INTEGRATION PROJECT(EARDIP-P176181) Implementation Support Mission (ISM) for the Federal Republic of Somalia Mogadishu, Somalia, February 16-18, 2025 Aide-Mémoire I. INTRODUCTION 1. A project implementation support mission (ISM) took place between February 16 to 18, 2025, in Mogadishu, Somalia. The mission was led by Naomi Halewood, Task Team Lead, Senior Digital Development Specialist. The team comprised Victor Kyalo, Senior Digital Development Specialist; Ariic David Reng, Digital Development Consultant and Ai Yamakami, Young Professional and Nancy Wainaina, Team Assistant. Giacomo Assenza, Cybersecurity Specialist; Miguel Angel, Senior Strategy and Operations Officer and Karl Hole, Security Consultant joined virtually. 2. The objectives of the mission were to: (i) review project implementation progress under each component including fiduciary and safeguards aspects of the project; (ii) hold consultation meeting with telecom stakeholders on the broadband infrastructure deployment; (iii) meet with Federal Member States (FMS) Focal Points; (iv) review status of digital activities under SCALED-UP1; and (v) hold technical discussion on digital government modernization between MOCT and Ministry of Finance. 3. The World Bank (WB) team wishes to thank the Somali delegation, comprising representatives from the Ministry of Communication and Technology (MoCT), National Communication Authority (NCA), Data Protection Agency (DPA) and the project implementation unit (PIU), for their active participation and valuable feedback on the progress made thus far. The team extends its appreciation to the Minister, His Excellency, Mohamed Adam Malim Ali, for his opening remarks in which he underscored the Government’s continued strong commitment to effective project implementation. A list of officials met during the mission is included in Annex 1, and the mission agenda in Annex 2. Table 1. High Level Project Summary Amount: US$80 million Project Development Objective (PDO): Promote the expansion of an integrated digital market across Eastern Africa by increasing cross-border broadband connectivity, data flows and digital trade in the region. Components of the Project: • Component 1: Connectivity Market Development and Integration (US$51.3M) • Component 2: Data Market Development and Integration (US$5.1M) • Component 3: Online Market Development and Integration (US$7.1M) • Component 4: Project Management and Implementation Support (US$16.5M) • Component 5: Contingent Emergency Response (US$0M) Key Dates Approval Effectiveness Closing 05/18/2023 11/30/2023 05/31/2028 1 Somalia Capacity Advancement, Livelihoods and Entrepreneurship, through Digital Uplift Project (P174769) 1 II. SUMMARY OF KEY MISSION AGREEMENTS 4. The mission discussed and agreed on the following key elements: • Disbursement. The current disbursement rate is 4.80% which is expected to reach 6.05% in April, 11.25% by December 2025 and 40% by the end of 2026. • Annual Work Plan and Budget (AWP&B). The PIU presented the revised AWP&B for FY25 which includes a disbursement of US$5,005,215. The PIU will finalize and submit the revised AWP&B for FY2025 by end of February 2025. • Advancing the four priority consultancies for connectivity deployment. The mission was updated on progress made on the four priority consultancies for broad infrastructure deployment. All the four consultancies are in the advanced stages of the submission and evaluation of the request for proposals (RFPs). Evaluation of the proposals for the Commercial Transaction Manual (CTM) has commenced and is expected to be completed by end of February 2025. Proposals for the Technical Feasibility Study (TFS) have been received, and evaluation is expected to be concluded and submitted by March 13, 2025. The Request for Proposal (RFP) for the Security Risk Management Consultancy (SRMC) is under review and expected to be launched before the end of February 2025. Lastly, the tender process for the Environment and Social Impact Assessment (ESIA) has commenced with the drafting of the Request for Expression of Interest (REOI) which is expected to go out before the end of February 2025. • Federal Member States (FMS) Focal Points. The team had a positive meeting with four (4) of the six (6) Federal Member State (FMS) Focal Points to continue collaboration and inclusiveness across board as the project implementation progresses. The FMS Focal Points noted the importance of the project for the country and the region and re-affirmed their commitment to work together to ensure a smooth implementation. In this regard, the FMS Focal Points will be attending the bi-monthly project meetings and other regular PIU meetings to stay informed and contribute to the project implementation and other updates. • Coordination with SCALED-UP. As the project is due to close by December 2025, the mission advised the PIU, NCA, and MoCT to ensure three key activities are completed, (i) construction and commissioning of the Data Center, (ii) establishment of CIRT, and (iii) Implementation of Market Observatory system. These shall be implemented and delivered well in advance of the closing date to ensure payments to the vendors are completed. PIU in consultation with the NCA will develop and submit a detailed implementation schedule with timelines for all three pending activities by end of February 2025. On Data Center, construction for both primary and secondary DC has begun with the primary data center civil works (funded by Somalia Government) expected to be completed in 40 days. The CIRT is at RFP stage, which is expected to be released by February 21st, 2025. This will be followed by 30 days of advertising and evaluation; the process may take 2 months to complete (target end of April 2025). • Technical Coordination between MoCT and MoF on digital government modernization and integration. This meeting’s objective was to discuss how MoCT and MoF may coordinate together under EARDIP. Both MoCT and MoF emphasized the importance of federal level coordination across the government on interconnectivity and agreed on taking the leadership in ensuring close liaison to avoid any duplication. The two key pieces of work led by MoCT are (i) GEA (The Government Enterprise Architecture) and (ii) National ICT Policy. MoF is leading the SERP (Enhancing Public Resource Management Project for Somalia), interconnectivity falls under its component 4: facilitate the harmonization of PFM systems between FGS and FMSs. One of the examples of similar initiatives respectively led by MoCT and MoF include Digital signature (Public key platform). MoCT has adopted the e-Government policy on January 27th, 2025, endorsed by the cabinet. This will give the ministry the mandate to spearhead applicable standards and overarching architecture, which are currently under discussion, for the whole of government adoption. On MoF side, one of the enforced structural benchmarks set by IMF include “Digital signature for the payment process (PKI)” which will be implemented by June 2025. While this is a MoF specific policy and cannot be automatically applied across the government, MoF envisions this type of digitalization to become a shared platform in the government and Somalia. MoCT and MoF agreed on possible next steps; (i) MoCT may provide comments on MoF’s mission in Nairobi on 27th February 2025, (ii) MoCT to assign MoF SERP focal point for EARDIP, (iii) MoF to provide comments on ToR for EARDIP, (iv) both MoCT and MoF to update the Ministry and WB on collaboration plan and the timeline. • Consultation with telecom stakeholders on the broadband infrastructure deployment. Due to last minute change of schedule request by the operators, the mission was not able to hold the 2 consultations with telecom stakeholders. The team discussed and agreed to hold this meeting before the next mission. III. PROJECT ACTIVITIES Component 1. Connectivity Market Development and Integration Sub-component 1.1. Cross border and backbone network connectivity. The mission discussed the progress on the four priority consultancies: (i) Commercial Transaction Manual (CTM), (ii) Technical Feasibility Study and Engineering Design, (iii) Security Risk Management Consultancy (SRMC), and (iv) the Environmental and Social Impact Assessment (ESIA). All the four consultancies are in the advanced stages of the submission and evaluation of the request for proposals. Evaluation of the proposals for the CTM is expected to be completed in February 2025. Submission of proposals for the Technical Feasibility Study and Engineering Design was extended from December 2024 (holiday season) to January 2025. Proposals have been received, and evaluation is expected to be concluded and submitted to the World Bank by March 13, 2025. The Request for Proposal (RFP) for the Security Risk Management Consultancy (SRMC) is under review and expected to be launched before the end of February 2025. Lastly, the tender process for the Environmental and Social Impact Assessment (ESIA) has commenced with the drafting of the Request for Expression of Interest (REOI) which is expected to go out before the end of February 2025. Sub-component 1.2. Last Mile Connectivity, including in borderland areas. The team discussed the need for MoCT to start conducting the Government Enterprise Architecture (GEA) assessment supported by SCALED-UP before starting on activities under this sub-component which include feasibility study of GovNet expansion and the actual financing of the infrastructure and network. On feasibility study for GovNet expansion, PIU has been consulting with MoCT, and ToR has been prepared, which MoCT expects to submit to WB by the 25th of February 2025. Sub-component 1.3. Enabling legal, regulatory, and institutional ICT environment. The NCA updated the team on the areas of progress made. To avoid duplication, it was discussed and agreed that the NCA will update the terms of reference for the technical study on the specification of spectrum equipment as some activities including the 5G Strategy have already been completed under the SCALED-UP. Other activities under this component include the National ICT Policy, Quality of Service, and Consumer Protection are also planned to be completed before the end of 2025. Component 2. Data Market Development and Integration Sub-component 2.1. Cybersecurity framework, infrastructure, and capacity. The mission clarified respective Cybersecurity frameworks under the SCALED-UP and EARDIP to avoid overlap. In the SCALED-UP, Cybersecurity is under CIRT, which an RFP is under review. EARDIP covers six other cybersecurity related activities, of which work plans are submitted to WB for review. The team agreed to have a clear work stream and framework for PIUs on different activities under SCALED-Up and EARDIP. WB highlighted concerns with delays seen in (i) CIRT, and (ii) Data Center under the SCALED-Up, and reiterated the urgency to meet the deadline before December 2025. The PIU, NCA, and MoCT agreed to prepare and share a clear schedule of activites/tasks on the delivery of the CIRT and data center, including the date for RFP submission. Sub-component 2.2. Data exchange, governance, and protection The mission discussed and confirmed that PIU and MoCT team will work on the ToR for the National Data Strategy and share with the WB team for review. This will lay the foundation for data exchange, governance, protection, hosting strategies and related activities including design, modality of operation, management of data, storage and computing requirements, hosting of government data, including green data centers, as well as a clear cloud adoption strategy. 3 Component 3. Online Market Development and Integration Sub-component 3.1. Digital cross-border trade, payments, and service enablers E-Transaction legislation has been developed under SCALED-UP. Activities under EARDIP will prioritize an E-Commerce Readiness Assessment and corresponding Strategy which will focus on current and prospective opportunities at the national, sub-national and regional levels and, in the process, include engagement with Somalia’s Ministry of Commerce and Industry. EARDIP will also include dedicated activities focused on the development of a Postal Services Policy, a Digital Postal Strategy, and a Digital Addressing Policy, as well as respective implementation plans and pilots. Sub-component 3.2. Regional Research and Education Networks (RENs), training for digital skills The SomaliREN is active and a member of the regional REN, UbuntuNet, based in Uganda. SomaliREN has committed the internet capacity financed under previous WB support, connecting one third of its ~50 universities and is in need to upgrade their capacity. Procurement documents to sole-source AfricaConnect42, a European Union initiative, has largely been completed and will be contracted when it becomes active in September 2025. The Bank team requested the M&E Specialist of the PIU to: (i) keep track of the number of universities and students connected (including gender ratio); and (ii) clarify the objectives and activities for The National Telecommunication and Technology Institute (NTTI) under EARDIP. Component 4. Project Management Sub-component 4.1 PIU staffing Commendable progress has been achieved on the staffing of the Project Implementation Unit (PIU). Most of the PIU staff are now on board including the Project Coordinator, Financial Management Specialist (FMS), Procurement Specialist (PS), Procurement Officer, Communication Specialists, Environment, Social and GBV specialists. The hiring of the Connectivity Specialist (shortlisting stage), Cyber Security Specialist, Security Specialist (shortlisting stage), Regulatory Advisor are also well advanced and are expected to join the team soon. In addition, four of the 6 FMS Focal Points including Banadir are already onboarded. As the key positions of the Environmental, Social, and GBV Specialists have now been hired, the mission reiterated the need to start the implementation of the ESCP in order to have in place a robust environment and social framework, in time for the tendering and onboarding of the contractors for the technical feasibility study, commercial transaction model, and security risk management. IV. Implementation Arrangements Environment and Social Standards and Risks. The mission took note of the upcoming Multi- Recipient ESF Workshop for EARDIP in Nairobi which will on-board the newly recruited Environmental, Social, and GBV specialists in the Project Implementation Units (PIU) in Somalia, South Sudan, the EAC, and IGAD for EARDIP implementation, review the ESF instruments and standards, develop a concrete timeline to put in place and maintain robust ESF frameworks and standards for the broadband infrastructure deployment and implementation of other project activities. WB team has emphasized the importance of having private sector operators on board and understanding what makes commercial sense, including different routes and types of fiber. Financial Management. The project is up to date regarding submission of quarterly interim unaudited financial reports (IFR) to the World Bank including the latest IFR for the quarter ended December 31, 2024, which was submitted before the stipulated deadline. The project maintains adequate accounting capacity headed by a Financial Management Specialist at the PIU supported by the team from the External Assistance Fiduciary Section (EAFS) in the Accountant General’s office. Both the level of disbursements at 4.1% and rate of cumulative budget absorption at 1.12% were noted to be low considering the project effectiveness date of December 13, 2023, and closing date of May 31, 2028. The project is advised to submit to the World Bank six (6) months disbursements projection based on 2 https://international-partnerships.ec.europa.eu/policies/programming/projects/africaconnect_en 4 the approved annual budget. The PIU was advised to enhance implementation of activities to boost the rate of budget absorption and level of disbursements. The ISR rating for financial management arrangements is therefore considered Moderately Satisfactory while the FM risk is assessed as Substantial. The latest FM supervision of the project highlighted concerns related to (i) inadequate internal audit oversight, (ii) low budget absorption, and (iii) delays in supplier payments processing. The external audit of project financial statements for FY2023 expressed unqualified (clean) opinion on the Project Preparation Advance (PPA) IDA V4530 but flagged delays in set-up of PIU, low budget absorption, gaps in bank reconciliation processes, and inadequate internal audit oversight in the management letter. The PIU and MoCT are requested to address these gaps in line with the time bound FM action plan agreed with the Bank. Procurement. The recruitment of most of key PIU staff members has been successfully completed. This includes the Project Coordinator, Financial Management Specialist (FMS), Procurement Specialist (PS), Procurement Officer, Communication Specialists, and the Environment, Social, and GBV Specialists. The hiring process for the few remaining PIU positions is currently at an advanced stage. During the mission, it was agreed that the recruitment for these remaining positions would be expedited. Additionally, other main procurement which have been started and in various stages of procurement include i) Consultancy Service for Security Risk Management Consultancy (SRMC), ii) Consultancy Services for Consumer Protection Regulation, Guideline and Implementation Strategy, iii) Provision of Consultancy Service for Technical Feasibility Study iv) Provision of Consultancy Service for Commercial Transaction Manual for Broadband Infrastructure Deployment, National and Sub-National ICT Policy and Strategy and Guidelines for Digital Infrastructure and e-Waste Management, v) Consultancy Service for Comprehensive Assessment of Spectrum Utilization and Monitoring Equipment Specification in Somalia, vi) Participation in the AfricaConnect3 Program for the support SomaliREN under EA-RDIP and vii) National and Sub-National ICT Policy and Strategy and Guidelines for Digital Infrastructure and e-Waste Management. Regarding the pending activities, it was agreed to expedite the procurement process to avoid any further delays. The Bank has identified certain deficiencies in the updating of data within STEP, necessitating improvements. Specifically, it has been noted that over thirty-two (32) out of fifty-two (52) procurement activities are flagged red in STEP, indicating delays or are no longer required. Consequently, the Bank has recommended that planned procurement activities be expedited, those deemed no longer necessary be cancelled in STEP, and signed contracts be uploaded in STEP as required. The Project Implementation Unit (PIU) is in the process of finalizing the Work Plan, which will be submitted to the Bank by the end of February 2025. Once finalized and approved, all procurement activities to be included in the Procurement Plan in STEP will be derived from the approved Project Work Plan. For complex, high-risk, and large-scale procurements, the Client may consider utilizing Hands-on Expanded Implementation Support (HEIS) provided by the World Bank. HEIS serves as a valuable tool aimed at addressing procurement challenges encountered by the Client throughout project implementation. This support may encompass technical assistance, capacity building, and hands-on guidance throughout the procurement process. Should the Client require this support, it is encouraged to formally request it. Regarding capacity building, the Bank facilitated in-person training on Contract Management in Nairobi from October 14 to October 17, 2024. This training was attended by the staff of the PIU. The Bank request that the Client utilize the knowledge and skills acquired during this training to ensure that contracts are managed effectively and in strict adherence to the terms stipulated in the signed contracts. The procurement rating remains as “Moderately Satisfactory.” 5 NEXT STEPS AND AGREED ACTIONS The following steps were agreed on. Table 1. Action Items S/No. Action Responsibility Due date 1 Submit to the WB the ESIA EOI technical PIU/MoCT March 7, 2025 evaluation report 2 Submit to the WB the CTM RFP technical PIU/MoCT March 7, 2025 evaluation report 3 Submit to WB ToRs for the Feasibility PIU/MoCT March 10, 2025 Study for GovNet Expansion 4 Submit to WB a concrete status update and EARDIP & March 10, 2025 implementation timeline for all pending SCALED_UP SCALED-UP activities (CIRT, Market PIUs/NCA Observatory, and Data Center) 5 Submit revised AWP&B for FY2025 PIU March 10, 2025 6 Submit to the WB the TFS RFP technical PIU/MoCT March 13, 2025 evaluation report 7 Submit to WB ToRs for Data Strategy and PIU/MoCT March 15, 2025 Governance Annexes: • Annex 1: List of Mission Participants • Annex 2: Mission Schedule 6 Annex 1: List of Mission Participants S/No. Name Position, Organization Federal Government of Somalia (FGS) 1 H.E. Mohamed Adam Moalim Ali Minister, MoCT 2 H.E. Ahmed Osman Dirie State Minister, MoCT 3 Abdiaziz Duwane Issak Director General, MoCT 4 Abdiaziz Mohamed Shire Project Coordinator, EARDIP PIU 5 Mustafa Y. Sheikh NCA Director General 6 Daud Abdi Hussein DPA Deputy Director General 7 Jama Abdi jama Senior Advisor (DPA) 8 Abdiaziz Mohamed Abdi NCA 9 Abukar Osman Project Coordinator SCALED _UP PIU 10 Abukar Malin Project Coordinator SERP PIU 11 Mohamoud Jama Financial Specialist 12 Mohamed Guled Procurement Specialist 13 Ahmed Burale Procurement Specialist, SCALED-UP PIU 14 Jamila Adow Communication Specialist 15 Abdullahi Guled Cybersecurity Advisor 16 Abdilatif Omar Environmental Specialist 17 Khadija Nuh Ali GBV Specialist 18 Muna Ismail Mohamed Social Dev. Specialist 19 Abdisamad Khalif Procurement Officer 20 Suad Dahir M & E Specialist 22 Galmudug Focal Point Abdinasir Gelle Elmi 22 Hirshabelle Focal Point Mohamed Nor Hussein 23 SouthWest Focal Point Sid Ali Abukar Hussein 24 Omar Mohamud Wardere BRA Focal Point 25 Mohamed Ali Ahmed SomaliREN – Chief Technical Officer World Bank Task Team Leader, Senior Digital Development 26 Naomi Halewood Specialist 27 Victor Kyalo Senior Digital Development Specialist 7 28 Ariic David Reng Digital Development Consultant 29 Ai Yamakami Young Professional 30 Nancy Muthoni Wainaina Team Assistant 8 Annex 2: Mission Schedule TIME SL DURATION TOPIC PARTICIPANTS (EAT) (Hours) Sunday, 16th February 2025 Introduction and Opening Remarks WB Task Team 1 0.5 ▪ H.E. Mohamed Adam Moalim Ali PIU ▪ Introduction Govt Delegation 11:30-12:00 ▪ Mission Objectives and Plan Annual Work Plan and Budget FY25 WB Task Team 2 1.5 ▪ Presentation and Review of AWPB FY25 PIU across all components Govt Delegation 12:00-01:30 ▪ Discussion and Action plan Lunch (01:30-03:15) Component 2 WB Task Team 3 1.0 ▪ Update on activity preparation and procurement PIU ▪ Discussion and Action plan Govt Delegation 03:15-03:00 Component 3 WB Task Team 4 1.0 ▪ Update on activity preparation and procurement PIU 03:00-04:30 ▪ Discussion and Action plan Govt Delegation Coffee/Tea (4:30-05:00) Monday, 17th February 2025 Review of SCALED-UP Activities WB Task Team 5 1.0 ▪ Update on CERT and Market Observatory IT PIU 09:30-10:00 system (IT System + Data Center Update) Govt Delegation ▪ Discussion and Action plan Meeting with Federal Member State Focal Points WB Task Team 6 2.0 and Representatives PIU ▪ Meeting with FMS Focal and Representatives Govt Delegation 10:30-12:30 Lunch (12:30-01:30) Technical Meeting of MoCT and MoF WB Task Team 02:30-05:00 8 1.5 ▪ Facilitate technical discussion between MoCT PIU and MoF on digital government modernization Govt Delegation Coffee/Tea (03:30-03:50) Tuesday, 18th February 2025 Planning for the Regional ESF Workshop WB Task Team 09:00-10:30 9 2.0 ▪ Discuss planning for the upcoming ESF PIU Workshop in Nairobi, Kenya, February 25 – 27, Govt Delegation 2025 Lunch (12:30-01:30) Aide-Memoire and Closing Remarks WB Task Team 10:30-12:00 10 2.0 ▪ Review action items in the Aide-Memoire PIU ▪ Closing remarks Govt Delegation End and Departure 9