At COP 27, Somalia was on a mission to rebrand itself

The Somali government was in Sharm el-Sheikh, Egypt, on a mission — to show the world its new face as a partner on climate change. The country attended the 27th United Nations Climate Change Conference, or COP 27, with the largest delegation in its history — 70 delegates as opposed to six last year — and its first minister of environment and climate change. The country is on the front lines of the climate crisis — currently facing a devastating drought. But despite the urgent need, the East African country has long struggled to access climate finance due to insecurity, inadequate government capacity, and massive debt load. The country is working to strengthen its institutions and, in turn, receive greater climate financing to build resilience to extreme weather by preparing “the right systems that donors can trust,” Dr. Mohamed Osman Mohamoud, national economic adviser and member of the Somali National Economic Council, told Devex on the sidelines of COP 27. Heavily indebted Somalia is part of the heavily indebted poor countries, or HIPC, global debt reduction process and has been in the International Monetary Fund-led Staff Monitoring Program for the past four years, which includes efforts to reduce spending, set benchmarks and indicators, and avoid new debt. IMF mission chief Laura Jaramillo praised the country for its economic reforms following review of its Extended Credit Facility, and said if progress continues, it could complete the HIPC process by the end of next year. This would reduce its debt from $5.2 billion to $700 million, Mohamoud said. "We are going through tough measures. We can't take loans, we can't pay loans," he said, adding that when the HIPC process is completed, the country would be eligible for new finance, such as concessional loans. In the meantime, Somalia is working to try to receive more grant funding. The country isn’t able to attract large scale private sector investment either, because it doesn’t have rules and policies on investing, he said. A new institution The country went through a significant shake-up in governance after elections that were delayed for over a year led to Hassan Sheikh Mohamud taking over the country’s reins in May. The new government created the first Ministry of Environment and Climate Change, and appointed Khadija Mohamed al-Makhzoumi as its first minister. “We have an institution; we have a minister; we have a focal point; we have a partner that you can contact and work with,” said Mohamoud. Before this, environment and climate change were managed as a directorate under the Office of the Prime Minister, with a director general. But this came with myriad limitations, Mohamoud said. A director general has less clout on the international stage, and isn’t, protocol-wise, able to enter minister-level meetings with other countries. And within the Somali government, ministers in other ministries such as water or agriculture would take on elements of the conversations around climate having more power in decision-making than a director general. “Climate was scattered all over when it was a directorate,” he said. “There hasn't been that coordinated, strong voice within the government.” Minister al-Makhzoumi has represented the country at a variety of international platforms beyond COP 27, such as the U.N. General Assembly and the Climate and Security Conference in Berlin. Some have criticized the government’s choice to appoint al-Makhzoumi over someone with an environmental background — she previously served as ambassador in Iraq and Pakistan. But Mohamoud said the minister’s role is a political one and her negotiating capacity and skills in diplomacy are strong — adding that her technical team will guide her through management of environmental policy. Somalia has received funding from the Green Climate Fund to strengthen its institutions around climate. The fund provides country governments with support to build up its National Designated Authority, or NDA, which is its term for government institutions that “serve as the interface between each country and the Fund.” The country has a $55.5 billion national determined contribution, or NDC, plan focused on mitigation and adaptation that spans a decade, which is in its third revision but hasn’t received funding yet, Mohamoud said. Mohamoud said COP 27 has been a unique opportunity to bring the debt and climate conversation to one table. For the first time Somalia’s Deputy Minister of Finance Abdiqafar Hange, as well as the team from their Debt Management Unit, are attending COP 27, and have met with international financial institutions. Shedding ‘a different light’ One of Somalia’s remaining multilateral creditors is the International Fund for Agricultural Development, or IFAD — with debt incurred over 20 years ago. IFAD started engaging with Somalia on programming starting in the early 1980s, but because of the war and the country’s debt the fund suspended its portfolio, only engaging on a smaller scale with grant funding. "We couldn't engage with Somalia for a long time as a natural sort of government to IFAD partner, as we do with other countries,” Dina Saleh, regional director of the Near East, North Africa and Europe Division at International Fund for Agricultural Development, told Devex. As part of the HIPC process, Somalia must repay its debt to international financing institutions — and this has recently been facilitated through third parties. In the last two years, there has been a shift in which Somalia’s government has reached out to its creditors to make repayment plans, Saleh said. Sweden and Germany announced funding towards paying off Somalia’s debt to IFAD during COP 27, whereas Belgium made a commitment a few months ago, she said. “Literally as we speak, this is happening — the clearance of debt,” Saleh said, adding that it's likely it will be resolved by the end of the year. “What's left is the administrative process,” she said. The country’s show of force at COP 27, the establishment of a new ministry, and having an environment champion in minister Khadija Mohamed al-Makhzoumi, who has “really been stepping up to engage with partners,” are all steps in the right direction, Saleh said. Once IFAD’s debt is cleared, there is a pipeline of about $40 million to $50 million in grant funding, which Saleh said could start flowing to the country next year. This is both core IFAD funding, but also from the Global Environment Facility and the Global Agriculture Food Security Program. In the last days of COP 27, it was announced the African Union and the Great Green Wall Initiative are now seriously considering Somalia’s participation in the initiative — an effort to create an 8,000-kilometer (5,000 miles) green corridor that runs from the Sahel through the Horn of Africa. “Their presence at COP has had a very tangible output to engage them in this kind of international stage and an African agenda,” Saleh said. The Somali government is “trying to really be out there and shed a different light on Somalia,” she said. “We're very optimistic. And we're really looking forward to partnering with them now on integrated investments, and not just small projects, but really looking at a longer-term strategy of development with the government of Somalia,” she added.