[{"bbox": [72, 100, 1161, 705], "category": "Table", "text": "<table><tr><td></td><td>weak PFM and oversight systems to the test.</td><td></td><td></td><td>reduce fiduciary and corruption risks, as well as facilitate technical and policy dialogue on resource sharing as a way to mitigate political tension. The projects envisaged under Outputs 1-3 of this AD will directly contribute to mitigate some of the risks in this area.</td></tr><tr><td>People and the organization</td><td>Risk 5: Lack of political leadership to drive investment climate and business environment reforms at federal and member state levels could sustain country fragility.</td><td>Medium</td><td>Medium</td><td>Outputs 4-5 of this AD will directly contribute to mitigate some of the risks in this category. More broadly, the EUD will – directly or through its regular engagement with IFIs and DFIs – continue to use its programmatic investments and accompanying technical/policy/political dialogue with Somali Authorities at various levels, to push for accelerated reforms.</td></tr></table>"}, {"bbox": [82, 707, 242, 730], "category": "Section-header", "text": "Lessons Learnt:"}, {"bbox": [82, 759, 1150, 812], "category": "List-item", "text": "- Build on positive engagement with FGC and OAG in the context of SRBC and in collaborating with IFIs e.g. in context of HIPC."}, {"bbox": [82, 815, 1150, 1012], "category": "List-item", "text": "- The FGC is a specially designed mechanism established jointly by development partners and Somali Authorities to reduce corruption in a limited number of strategic high value procurement and concession contracts. Commitment to the mechanism by the FGS, coupled with dedicated TA, has been part of SRBC conditionality. The effectiveness of the initiative has been widely recognised⁴, and as EU we have been closely engaged through funding the sensitive position of Donor Delegate to the FGC, as well as providing ad-hoc TA to specific transactions under FGC review. Continuing and enhancing our direct engagement in what is *de facto* Somalia's most effective anti-corruption initiative, will be an important feature of the EU's overall engagement in Somalia."}, {"bbox": [82, 1014, 1150, 1153], "category": "List-item", "text": "- There has been growing interest in the distinctive FGC model and potential lessons for other countries. Highlighted results from FGC advice to date include improvements in the value for money of government spending through competitive tendering of security sector rations contracts and renegotiation of fiscal terms to improve concession contracts such as those pertaining Mogadishu Port and Airport management, and provision of strategic advice in sensitive areas such development of the oil and gas sector (...)."}, {"bbox": [82, 1156, 1150, 1437], "category": "List-item", "text": "- Support to OAG will contribute to strengthen external scrutiny of FGS and FMS finances by gradually instituting an effective independent audit function in Somalia (including, potentially, in Somaliland). It will build on the encouraging progress made in establishing a modern audit function in Somalia, driven as part of the SRBC's \"complementary measures\". Specifically, engagement to date has occurred through both substantive TA to the OAG and MoF, as well as the incentive effect provided by specific VT benchmarks (e.g. around timely submission of government financial accounts for audit), and policy dialogue around the four eligibility criteria (e.g. by including in the latest MAF an indicator on follow-up to OAG findings and recommendations). EU's engagement in this area has been fruitful to date: by way of example, since 2019 (for the first time in its history) OAG has been undertaking and publishing financial and compliance audits of FGS institutions, broadly in line with internationally accepted standards."}, {"bbox": [82, 1439, 1150, 1544], "category": "List-item", "text": "- There has been a growing interest from Donors and Development Finance Institutions is supporting private investments in Somalia. This interest has been driven from a resilient local private sector and entrepreneurial culture, and the economic reform agenda followed by the federal government. The EU has been engaged in this area since 2018 notably through the Inclusive Local Economic Development Programme (ILED). Outreach to"}, {"bbox": [70, 1589, 1154, 1662], "category": "Footnote", "text": "⁴ See Somalia case study in a recent WBG global report on fighting corruption https://www.worldbank.org/en/topic/governance/publication/enhancing-government-effectiveness-and-transparency-the-fight-against-corruption"}, {"bbox": [1039, 1662, 1154, 1686], "category": "Page-footer", "text": "Page 10 of 21"}]