JOHANNESBURG (Halbeeg News) – The European Union says it has approved 100 million euros ($116 million) in its first-ever budget support to Somalia’s government in the latest sign of confidence in a country recovering from civil war.
In a statement on Wednesday EU which calls itself the largest donor to the Horn of Africa nation affirmed that the funds which will be disbursed from next month through to 2021 will be instrumental in fostering federalism in Somalia and enabling government’s delivery services to citizens.
“With this budget support operation (also called State Building and Resilience Contract in Somalia), the European Union aims to support federalism in Somalia through increased and improved inter-governmental fiscal transfers from the Federal Government to its the Federal Member States,” the EU said in a statement.
The EU statement says “this combined response opens entirely new opportunities” in Somalia’s nation-building and will help to increase local authorities’ role in providing basic services.
The EU announcement comes a day after the World Bank said it would provide $80 million in direct financing to Somalia’s government for the first time in 27 years, calling it a “milestone.”
The Washington-based lender, which suspended ties with the country when war broke out in 1991, resumed support for Somalia in 2003, at the time saying it would focus on HIV/AIDS and livestock programs with other organizations, but it has not approved any direct lending to the government to date.
Its board had approved financing of $60 million for the Recurrent Cost and Reform Financing Project and $20 million for the Domestic Revenue and Public Financial Management Capacity Strengthening Project, it said in a statement.
Finance Minister Abdirahman Duale Beileh said the grants show that international financial agencies have faith the government is capable of fighting against corruption.
“The work we have done and the trustworthiness we have earned brought us here,” he said.
Beileh noted that in recent years, Somalia’s government has made a tangible improvement in the management of the economy and its institutions.
Halbeeg News and News agencies
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