Somalia Looks Beyond Aid as African Development Bank Backs Private Sector Growth

Convened on 19 September by the Somali Development and Reconstruction Bank, the forum brought together discussions around the theme, “Financing Somalia’s Next Chapter: From Recovery to Sustainable Development.”

Somalia's efforts to build an economy supported by local businesses, productive investment and stronger institutions received renewed backing from the African Development Bank Group at the Somali Development Finance Forum in Mogadishu. The discussions focused on moving from aid dependence towards sustainable growth led by the private sector, with greater access to long-term finance that can help businesses expand and create jobs. For Somalia, that transition involves developing domestic institutions capable of turning investment commitments into lasting economic opportunities.

Building the Capacity to Finance Somalia's Future

Convened on 19 September by the Somali Development and Reconstruction Bank, the forum brought together discussions around the theme, "Financing Somalia's Next Chapter: From Recovery to Sustainable Development." The SDRB, Somalia's national development finance institution, was first created in 1968 and re-established in 2014, giving its role at the gathering particular significance as the country works to rebuild institutions that can support its economic development. Its position connects the government's development priorities with the financing needs of businesses and productive sectors.

President Hassan Sheikh Mohamud told the opening session that the federal government was committed to development finance that takes a long-term view, creates sustainable markets and directs investment towards sectors capable of driving future growth. Deputy Prime Minister Salah Jama stressed that the transition requires Somalia to build its own capacity to mobilise finance, going beyond finding replacement sources for aid. He outlined a model drawing on sustainable public and private investment in agriculture, livestock, fisheries, renewable energy and small and medium-sized enterprises, placing domestic production and business development at the centre of the discussion.

Turning Investment Opportunities Into Fundable Projects

African Development Bank Director General for East Africa Alex Mubiru called for stronger institutions, a more disciplined pipeline of investment projects and greater use of instruments that help investors manage risk. Speaking on a panel about Somalia's development finance system, he explained that attracting private capital depends on institutions being able to mobilise long-term funding, reduce perceived risks and develop commercially credible projects that support employment and deliver lasting benefits. These requirements connect the ambition to attract investment with the practical work needed to make projects ready for financing.

Mubiru urged Somalia to concentrate resources on a few high-potential value chains capable of creating jobs and strengthening local production, giving investment efforts a clearer focus. His remarks highlighted the importance of selecting opportunities where finance can support sustained business activity and measurable development outcomes. The African Development Bank Group's support places institutional strength and project preparation alongside access to capital, recognising that funding needs a reliable route into productive investment if it is to contribute to economic resilience.

New Partnerships Bring Finance Closer to Small Businesses

The SDRB signed financing partnership agreements with Asal Microfinance, Maal Microfinance and Himilo Microfinance under its Ramad Microfinance Programme, taking a concrete step towards expanding access to Sharia-compliant finance for micro, small and medium-sized enterprises and productive sectors. President Mohamud described the occasion as historic, saying that a public development bank in Somalia making its first investment demonstrated progress in rebuilding national institutions and advancing economic development. The partnerships give the forum's wider discussions a practical connection to smaller businesses seeking financial support.

The African Development Bank Group's participation builds on its longstanding relationship with Somalia and the priorities set out in its Country Strategy Paper for 2025–2030, which support productive investment, private-sector development, economic resilience and employment. Strengthening institutions such as the SDRB forms part of that work, together with developing investment pipelines and partnerships that can channel development finance into businesses, jobs and sustainable growth. Somalia's next stage of development will depend in part on how effectively these institutions connect long-term funding with opportunities across the economy.