5/22/2024
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World Bank's funding threat averted as Somalia submits crucial audit report


Saturday March 30, 2024


Ahmed Gutale. Auditor General of Somalia. Photo credit: SONNA

Mogadishu (HOL)  - The Auditor General of Somalia, Ahmed Gutale, announced the submission of crucial audit reports for World Bank-funded projects, possibly averting a potential funding crisis. The submission occurred barely a day after a leaked World Bank letter to Somalia's finance ministry hinted at potential cuts, citing delays in receiving the crucial financial documents.

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Gutale expressed his satisfaction on X, previously known as Twitter, by stating, "The Office of the Auditor General FRS has successfully submitted the Audit Reports for all World Bank-funded projects implemented by the Federal Government of Somalia." He acknowledged the collaborative efforts of the Ministry of Finance, Project Coordinators, and the World Bank in meeting the critical deadline.

The World Bank, in its correspondence with the Somali government, had emphasized the necessity of submitting the audit report by March 31, 2024, following a missed initial deadline of June 30, 2023. This report was vital to maintain the flow of financial support, including Somalia's access to $275 million in International Development Association (IDA) Grants for 2024.

The urgency of the World Bank's warning earlier was rooted in the prolonged delay in auditing World Bank-financed projects, which risked the existing financial support and the initiation of new projects. The global lender had made it clear that failure to meet the extended deadline would result in halted projects, suspended grant disbursements, and ceased financial negotiations and payments, severely impacting Somalia's developmental agenda.

Somalia's financial journey, marked by its completion of the Heavily Indebted Poor Countries (HIPC) Initiative in December 2023, saw its external debt plummet from 64% of GDP in 2018 to less than 6% at year-end. This transition, catalyzing $4.5 billion in debt forgiveness, was a testament to Somalia's efforts in stabilizing its economy and securing additional financial resources.




 





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