Mogadishu: The African Development Bank Group (AfDB) said it has approved a grant of $6.6 million to strengthen Somalia’s financial architecture for inclusive and equitable growth.
AfDB said in a statement issued on Monday that the Somalia Financial Sector Development Project will also enhance financial sector expertise through targeted training and assistance.
The project will focus on improving the capacity of financial institutions, including the Central Bank of Somalia, the Somali Development and Reconstruction Bank, and the Financial Reporting Center, to formulate efficient credit delivery and implement anti-money laundering and counter-terrorism financing measures, Xinhua news agency reported.
“This will also build robust national financial systems that offer increased long-term finance availability, reduced intermediation costs, and improved financial infrastructure,” said Ahmed Attout, AfDB’s director of the Financial Sector Development Department.
Somalia has long grappled with security threats from armed groups that depend on illicit financing, and strengthening its financial institutions is thus crucial for its stability and that of the wider Horn of Africa region, according to the AfDB.
AfDB said the reforms seek to build a competitive and globally connected financial sector in Somalia, enhancing stability, trust, and financial inclusion, and attracting private investment. “This is a timely intervention that will enhance governance, accountability, skills, and technology development while fostering private sector growth through regulatory improvements and financial sector development,” Attout said.
According to the Bank, institutional barriers, as well as insecurity, have made Somalia’s integration into the global financial system difficult.
The absence of intermediary and correspondent banking services has further isolated the country from international financial networks, limiting critical remittance inflows.
–IANS