The European Union (EU) this week launched three new projects worth €11.8 million ($14.3 million) to support the struggling private sector in Somalia.

The three projects – Finance for Inclusive Growth, EU Contribution to the Nordic Fund, and Support to Policy Dialogue on Investment Climate – are designed to provide relevant funding to local small- and medium-size enterprises while supporting the investment climate, according to a statement by the EU.

Covid-19 has greatly hit Somalia’s private sector, contracting sales and employment by about 30 percent and leaving most firms with liquidity challenges, according to a World Bank survey.

The study, which was conducted with support from United Nations Industrial Development Organisation, the Somali Ministry of Commerce and Industry and the Somali Chamber of Commerce, found about 45 percent of firms surveyed had to suspend operations, on average for about seven weeks.

Two-thirds of firms experienced weakened demand while 70 percent sustained disruptions to their supplies of inputs and raw materials.

The EU-funded projects, according to the body’s Ambassador to Somalia, Nicolas Berlanga, will give micro, small, and medium businesses access to credit and improve regulations that will boost the private sector in country.

‘Launching [three] private sector projects with Minister of Planning (11.8 mill euro), comprising revolving funds, guarantees for loans, technical assistance; and collaboration to improve the business climate that may attract European investors to Somalia. Stability brings prosperity’, he tweeted.

For his part, the country’s Minister of Planning, Gamal Hassan, said continued investment in Somalia’s private sector was integral for inclusive growth.

‘We welcome the continued support from the EU to achieve a stronger and more prosperous Somalia’, the statement quoted Hassan as saying at the launching in Mogadishu.

Also speaking, the country’s Deputy Minister of Finance, Abdullahi Sheikh, acknowledged the key role private sector plays in stimulating and growing the Somali economy.

‘Our government has heavily invested in the sector with the aim of creating employment and sustainably growing the economy’, Sheikh said.

‘These initiatives launched today [02 February] by the EU support our continued resolve of providing better livelihoods to our people and our local communities’.

Sources: European Union Nicolas Berlanga

Photo source: AMISOM Public Information