In 2014 the Federal Government of Somalia (FGS) and the international community established a high-level and hybrid institution - the Financial Governance Committee (FGC) - to increase transparency and accountability on key financial governance issues. The first biannual review of the FGC highlighted the need for additional, more sustainable financing to enable the FGC to fulfil its mandate. This project provides the FGC with: a) predictable, reliable funding for its basic operations and b) technical assistance to help advance its work program in the FGC’s second year.
Component 1: Facilitating policy dialogue and mutual accountability on financial governance
This component will finance the main elements of the FGC architecture. It will also aim to strengthen mutual accountability between the government and international partners as well as between government and key Somali actors by monitoring and communicating financial governance progress and stimulating public debate.
Component 2: Strengthening high value public procurement and concessions
This component will provide dedicated technical assistance to strengthen the area of high value public procurement and concessions. It will support the FGC and the FGS by facilitating technical advisory services and by improving transparency in strategic procurement and concessions.
Component 3: Supporting Oversight and Transparency of Asset Recovery
This component will contribute to greater transparency of the asset recovery process by supporting the FGC’s oversight role and monitoring asset recovery and the use of proceeds of recovered assets. It will complement the assistance provided under the World Bank / UNODC Stolen Asset Recovery (STAR) initiative and provide limited technical assistance to support the Central Bank of Somalia and the government in implementing its asset recovery strategy, if required.
This project complements the ongoing Capacity Injection Project (CIP) targeting the Federal Government of Somalia and the Puntland State Government. Civil service reform remains a priority of the Government of Somaliland (GoSL) and has been identified as a key priority in the Somaliland Special Arrangement (SSA). A Public Service Reform Steering Committee is responsible for providing strategic oversight and guidance for the implementation of Somaliland’s Public Service Reform Strategy. The GoSL has requested World Bank support to build the foundation for longer-term civil service reform and institutional development. The project is designed under the Series of Project (SOP) instrument.
This project is the first in series of projects designed to support an operational payroll and payment system for the non-security sector in Somalia. Phase I of the program is an emergency operation prepared in response to an urgent request from government for the six-month period from July 1 to December 31, 2014. With the end of the Norwegian-funded Special Financing Facility (SFF) in 2014, the project filled the gap in funding salaries and other recurrent costs that would have been created, especially in the light of poor domestic revenue performance. The SFF, focused on recurrent and capital expenditure, was envisioned as a temporary bridging mechanism, and has helped to jump-start the PFM reform process. The Federal Government of Somalia (FGS), World Bank, Government of Norway, and Donors agreed that the World Bank-administered MPF would take over the financing of recurrent costs from the SFF, in line with the comparative advantages of the Bank’s fiduciary and macro-policy frameworks and dialogue with the government.
Since RCRF I, important political and state building milestones have been met in the state formation process that alter the context for RCRF II. The elements of Somalia’s future federation are emerging and there is an increasing strategic importance to ensure emerging and established federal member states are part of the broader fiscal and administrative discussions. This emerging sub-national environment is a new and important factor in the context for development assistance in Somalia and specifically for RCRF II. Regions and federal member states have been engaged with RCRF II on the basis of a series of ‘Readiness Criteria’ before they will be eligible to receive financing, as set out under Component 2. The readiness criteria will cover 3 major areas: strategic; macro-fiscal; and PFM/Administration. Meeting the criteria is an essential pre-condition for governments to access RCRF II financing, and in subsequent years will be followed by an ongoing process of routine monitoring against an agreed set of benchmarks.
Components Phase II, starting in 2015, will consolidate the gains made under Phase I, and will strengthen macro-fiscal management, Central Bank reform, and potential targeted support to expanded social service delivery. Phase II will also explore options for the expansion of recurrent cost support to regional governments.Component 1: Support to Core Government Functions in MDAs in FGS
• Support coordination, administration, communication, management, procurement, monitoring and evaluation (M&E) as well as impact-evaluation, auditing and dissemination of project activities in FGS, Puntland and the IJA. It finances dedicated staff to cover administration, financial management, procurement and communications. It also supports efforts to develop and strengthen the Fiduciary Sections of the Offices of Accountant General in FGS, Puntland, IJA and interim and emerging states through the financing of equipment, furniture and fillings, capacity building, technical assistance, and other inputs as required. The project also supports the Offices of the respective Auditor Generals with technical assistance to provide annual audits and the Central Bank of Somalia with technical assistance to strengthen the payments systems.ISR(1)(Nov 15)
The Somali Compact recognized capacity development as a key enabler essential for delivering its peacebuilding and state-building priorities. It identified the need for dedicated support to strengthen core government functions, improving civil service management and building capacity at the center of government. To deliver on these priorities, the government decided to establish a Government Flagship Program and requested joint support by the World Bank, UNDP and development partners. In response, the Institutional Capacity Development Program, a joint approach to capacity building in Somalia has been developed. The program is designed to inject capacity, filling urgent, strategic capacity gaps and building the foundation for longer-term civil service reform and institutional development.
The Federal Government of Somalia (FGS) requested rapid support from development partners to help raise the capacity of the government as articulated in the Somali Compact. Core government functions are also prioritized within the Somaliland Special Arrangement. To respond to this need, the World Bank is proposing a suite of three complementary projects to be funded through the MPF to: (i) provide recurrent financing of the government’s budget; (ii) support PFM reform, and (iii) inject capacity to fill urgent capacity gaps for implementing programs and developing initial functionality.
The PFM reform project aims at establishing systems for more transparent and accountable management and use of public funds. It focuses on the implementation of medium-term fiscal frameworks to underpin planning and annual budget preparation; revenue mobilization and tax administration; financial management information system; expenditure control; procurement, accounting and financial reporting; auditing; monitoring; and establishment of structures to oversee PFM reform in Somalia.Component 1: Revenue mobilization, planning and budget preparation