World Bank lauds economic growth prospects in Somalia

MOGADISHU, Sept 08 (Xinhua): The World Bank (WB) has lauded the progress made in realising economic recovery in Somalia, saying it has been steady and sustained.

In its economic update on Somalia, the lender said the economy is estimated to have expanded by 2.8 per cent in 2018, compared to 1.4 per cent in 2017, following a modest rebound of the agriculture sector from the effects of the 2016/17 drought.

"While this progress is encouraging, the available fiscal space remains insufficient to meet expenditure needs education and health sectors," the World Bank said in a report which was released on Thursday evening.

A growth of 2.9 per cent is the forecast for 2019 and it is projected to expand by 3.2-3.5 per cent over the medium-term, assuming the current reform momentum continues.

The 4th edition of the World Bank report says heightened economic activity combined with reforms in tax policies and tax administration have contributed to domestic revenues increasing by 29 per cent in 2018, albeit from a low base.

Hugh Riddell, World Bank country manager for Somalia said the government is laying the foundations for longer term economic development, but human capital development is essential for growth to be inclusive and sustainable.

"Attracting more public and private investment into Somalia's education sector is therefore fundamental to securing poverty reduction in line with the hopes of the new National Development Plan," Riddell said.