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World Bank introduces $125M drought insurance grant for Somali pastoralists
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    Thursday August 1, 2024



    FILE - A pastoralist in northern Somalia, a region hit hard by drought. He lost almost half of his sheep flock that originally numbered 70. UNICEF Somalia/Jamal Abdi Sarman 


    Mogadishu (HOL) — The World Bank has approved a $125 million Development Policy Financing (DPF) grant to enhance Somalia's economic resilience. The initiative introduces drought index insurance to 180,000 Somali pastoralists, including 90,000 women.

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    The grant is the first of two in a program designed to boost government revenue, manage public debt more effectively, and ensure accountability in public spending. Additionally, it aims to provide microfinance to low-income groups, particularly those in climate-vulnerable sectors such as agriculture, fisheries, and micro-businesses. Another key objective is to improve access to affordable, eco-friendly electricity and support the development of the fisheries sector.

    "This DPF shows the government's commitment to vital structural reforms following the Heavily Indebted Poor Countries (HIPC) Completion Point, setting the stage for a more stable and sustainable future," said Kristina Svensson, World Bank Country Manager for Somalia.

    According to Stella Ilieva, Task Team Leader and Senior Economist, "The sustainability of public finances, supported by the DPF, is critical for economic resilience. Strengthening domestic revenue mobilization, better managing public debt, and enhancing accountability in public spending are key for funding development and achieving macroeconomic stability."

    Somalia is highly vulnerable to climate change, being the world's second most exposed country. Frequent droughts and floods exacerbate its social and political challenges. 
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