African Development Bank Group has approved a $6.6 million grant to assist the Federal Government of Somalia (FGS) in enhancing state capacity to develop its financial infrastructure, promoting inclusive and equitable growth.
The Somalia Financial Sector Development Project will concentrate on strengthening the capabilities of financial institutions, including the Central Bank of Somalia, Somalia Development and Reconstruction Bank, and the Financial Reporting Center (FRC), to improve credit delivery systems and implement measures to combat money laundering and terrorism financing. It will also provide targeted training and support to bolster financial sector expertise.
These reforms aim to create a competitive, globally connected financial sector in Somalia, boosting stability, trust, and financial inclusion, while attracting private investment.
Somalia has faced persistent security challenges from armed groups reliant on illicit financing. Strengthening its financial institutions is key to ensuring stability both within the country and in the wider Horn of Africa region. Integration into the global financial system has been hampered by security concerns and institutional challenges. The lack of intermediary and correspondent banking services has further isolated the country, restricting critical remittance inflows.
Enhancing Somalia’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) capabilities in line with international standards will facilitate the country’s integration into the global financial system.
“This timely intervention will improve governance, accountability, skills, and technology development while fostering private sector growth through regulatory enhancements and financial sector progress,” said Ahmed Attout, the Bank Group’s Director of Financial Sector Development. “It will also build a resilient national financial system, increasing the availability of long-term finance, reducing intermediation costs, and improving financial infrastructure.”
