WASHINGTON DC, March 31, 2020 – The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, is pleased to announce that the Federal Government of Somalia has become the 182nd member of the Agency, following normalization of its financial relationship with the World Bank. Against the backdrop of the COVID-19 pandemic, Somalia’s membership affords it new opportunities for drawing foreign direct investment and fostering economic growth in the coming years.
“I applaud the Federal Government of Somalia on successfully meeting its membership requirements with MIGA,” MIGA Executive Vice President Hiroshi Matano said. “In the face of the coronavirus outbreak and uncertainty about the capacity in Sub-Saharan Africa to respond, Somalia’s membership with MIGA marks an important milestone toward realizing the country’s long-term goals of economic growth and prosperity. We look forward to working with Somalia and the investment community to deliver real results on the ground.”
While Somalia has a vibrant and resilient private sector with high potential for investment and growth, its current challenges include the need to improve business regulation, enhance trade facilitation and transparency, and manage security risks. MIGA’s experience working in other conflict-affected states will inform its dialogue with prospective investment partners on these and other important issues.
“Somalia’s vibrant private sector is key to our national development, economic prosperity and social progress. Membership in MIGA will ensure support to our private sector as well as foreign investors to expand, invest and create opportunities to enable sustainable development at a crucial time for the global economy,” said Somalia’s Minister of Finance, Abdirahman Duale Beileh.
MIGA has already begun discussions with funds interested in investing in Somalia, including in the agribusiness and small and mid-sized enterprise finance sectors. In the intermediate term, MIGA is exploring opportunities in the information and communications technology and energy. MIGA will also look at opportunities with the Somali diaspora to identify opportunities for further high-impact foreign investment that will spur economic development and growth in Somalia.
The World Bank Country Director for Somalia, Felipe Jamarillo said, “New efforts by the government to restore stability and governance, and to attract and protect investment through proper legal and regulatory governance, are opening exciting opportunities for development in Somalia. We are delighted that with membership of MIGA completed, the full complement of World Bank Group instruments is now open for business to support Somalia’s revival.”
The World Bank program in Somalia is largely funded by the Multi-Partner Fund and support from pre-arrears clearance grants. The current MPF portfolio focuses on core state functions, socio-economic recovery and urban development in Somalia. The MPF is engaging with the government to support the development of a professional and sustainable civil service. These reforms are being implemented federally and in Federal Member States to ensure national coverage.
Since re-engaging in 2013, the World Bank program in Somalia has targeted the re-establishment of core government functions, including Public Finance Management, economic governance and laying the foundations for longer-term sustainable development and poverty reduction. To date, activities have been funded by the Multi-Partner Fund, with the support of Denmark, the European Union, Finland, Italy, Norway, Sweden, Switzerland, the United Kingdom, and the United States. With the full normalization of relations, IDA is preparing a range of new investment aimed at providing rapid response to households impacted by recent droughts and flooding, reducing poverty by delivering social protection to over 200,000 women with children under 5, improving education and healthcare, boosting water and electricity supply, and investing in other critical infrastructure projects.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over US$55 billion in guarantees across 116 developing countries.