The Local Development Fund managed by UNCDF in Somalia helped Somali local governments to deliver infrastructure projects for over $10 million in the past three years, 2014-2016.

This was reported to the meeting of the Subworking Group on Public Financial Management that took place in Mogadishu on 25 May 2017 co-chaired by the Somali Ministry of Finance and DFID. Anka Kitunzi, UNCDF Chief Technical Advisor for Somalia and Dmitry Pozhidaev, UNCDF Regional Advisor for Southern and East Africa stressed that the LDF is not simply a funds transfer mechanism but a comprehensive and fiduciary robust system of planning, implementation reporting and auditing for local governments that allows effective delivery of basic public and economic services.

Most of the investment in 2013-2016 were made in the road sector reflecting the dire need for improved road infrastructure felt in all regions of Somalia. The second most important area was water and sanitation provision as well as solid and liquid waste management. Local governments also invested in commercial infrastructure to boost local economic development as well as in health and education services and social infrastructure such as community and sport centres.

An independent study of the LDF contribution to the road sector in Somalia commissioned by DANIDA in 2016 stresses several significant impacts beyond direct economic gains that the LDF support produced, such as improved perception of local administration; enhanced business development and easy access to factor and production markets; improved town cohesion and urbanization; and eventually, better peace and security.

Currently the LDF operates in 16 districts throughout Somalia as part of the UN Joint Programme on Local Governance and Decentralized Service Delivery (JPLG). There are plans to expand the LDF to the new federal member states in the south of the country to support their stabilization and development.

At the same time, UNCDF continues to innovate in the design and implementation of the LDF where it has been implemented for a number of years. The innovations include use of a bulk transfer mechanism via state Treasuries as well as a graduation scheme for districts where the LDF has achieved its objectives to allow new, less developed, districts to join the LDF.

UNCDF, together with the other JPLG partners, is working on transforming the LDF into an intergovernmental transfer system for discretionary and sector capital and recurrent grants to be fully owned and implemented by the partner governments.

For additional information please contact:

Mr Dmitry Pozhidaev
Chief Technical Advisor
dmitry.pozhidaev@uncdf.org