The proposed reforms aim to establish a competitive and globally integrated financial sector within Somalia. By doing so, we can enhance stability, foster trust, promote financial inclusion, and attract private investment.

The African Development Bank Group has granted $6.6 million to assist the Federal Government of Somalia (FGS) in enhancing its state capacity to develop a robust financial framework aimed at fostering inclusive and equitable growth.

The Somalia Financial Sector Development Project will concentrate on bolstering the capabilities of financial institutions, including the Central Bank of Somalia, the Somalia Development and Reconstruction Bank, and the Financial Reporting Center (FRC). This initiative aims to improve efficient credit delivery and implement measures against money laundering and the financing of terrorism. Additionally, it will provide targeted training and support to enhance expertise within the financial sector.

These reforms are designed to create a competitive and globally integrated financial sector in Somalia, thereby increasing stability, trust, and financial inclusion while attracting private investment.

Somalia has faced persistent security challenges from armed groups reliant on illicit funding. Consequently, fortifying its financial institutions is vital for both national stability and the broader Horn of Africa region. The country’s integration into the global financial system has been obstructed by insecurity and institutional challenges. The lack of intermediary and correspondent banking services has further distanced Somalia from international financial networks, restricting essential remittance flows.

By strengthening the country’s Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) framework and aligning it with international standards, Somalia can facilitate its integration into the global financial system.

"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,” said Ahmed Attout, the Bank Group’s Director of Financial Sector Development. “This will also build robust national financial systems that offer increased long-term finance availability, reduced intermediation costs, and improved financial infrastructure.”