The African Development Bank has approved $25.1m to Somalia to bolster the government’S efforts to mitigate the national and regional impacts of the COVID-19 pandemic.
The funding comprised a $10.04m grant from Pillar 1 of the AfDB’s Transition Support Facility and a $15.06m grant from the Regional Operations Envelope, comes under the umbrella of the bank’s COVID-19 Response Facility.
“It is the first time the bank is leveraging the Regional Operation Envelope resources for a Budget Support Operation. This approach was pertinent to ensure that Somalia has adequate resources to contain the spread of the disease in its territory and limit cross-border impacts that pose serious risks for health, social and economic development for the Horn of Africa sub-region,” said Acting AfDB Director General for East Africa, Nnenna Nwabufo.
The Somali government is expected to use the fund to carry out three interlinked responses to the COVID-19 pandemic that will enhance the health system, safeguard livelihoods, social protection, support labour force productivity, and economic activity.
A statement by AfDB said, “Health-sector interventions include increasing the country’s ICU capacity, boosting infection prevention and control measures, and widening the provision of personal protective equipment. Social protection measures include provision of nutrition-linked cash transfers and compensation for those engaged in livestock markets, as well as programs to offer temporary tax and customs duty relief, and 50 per cent relief on staple food, including cooking oil and flour.”
According to the statement, among initiatives aiming to support the workforce and economy are the establishment of a financing facility to support micro, small and medium enterprises, the introduction of permanent tax and customs increases on tobacco, beauty products, and plastic bags; and advancement of certification procedures for job-creating local production of COVID-19 supplies.
Somalia recorded its first COVID-19 case on 18 March and reacted by suspending non-essential business and social activities, closing off air and sea connections except for goods, and introducing partial curfews and lockdowns.
The crisis has placed the country’s recent socio-economic progress in jeopardy and increased its susceptibility to political instability and climate-induced shocks. It has also experienced swarms of locusts over the past year that have increased food insecurity.
Under a worst-case scenario, Somalia’s real GDP is forecast to contract by 5.4 per cent in 2020 and inflation to hit 6.3 per cent as imports decrease.
The AfDB grant aligned with Somalia’s development objectives and COVID-19 preparedness and response plans, said the statement, adding that the intervention also aligns with the bank’s 10-Year Strategy, and its Eastern Africa Regional Integration Strategy and broader efforts to combat fragility and build resilience in Africa.
