AfDB backs Somalia's shift from aid to private sector-led development finance
African Development Bank says it supports Somalia's move to private sector-led growth as the country's development bank signs first microfinance agreements.
The story in focus
The African Development Bank Group says it supports Somalia's transition from aid dependence toward private sector-led growth and long-term development finance. The position was set out at a Somali Development Finance Forum in Mogadishu, where the Somali Development and Reconstruction Bank signed financing agreements with three microfinance institutions under its Ramad Microfinance Programme.
- The Somali Development Finance Forum was convened in Mogadishu on 19 September by the Somali Development and Reconstruction Bank.
- The SDRB signed financing agreements with Asal, Maal and Himilo microfinance institutions under its Ramad Microfinance Programme.
- AfDB East Africa Director General Alex Mubiru called for a disciplined investment pipeline and more risk-mitigation instruments.
Bank backs a financing transition
The African Development Bank Group reaffirmed its support for Somalia's shift from aid dependence toward sustainable, private sector-led growth, stronger domestic institutions and greater mobilisation of long-term development finance. The Bank's position was announced in a press release dated 8 October 2026, describing a forum held in Mogadishu on 19 September.
The Somali Development Finance Forum was convened by the Somali Development and Reconstruction Bank, first created in 1968 and re-established in 2014, under the theme of financing Somalia's next chapter from recovery to sustainable development. The Bank said its participation builds on its partnership with Somalia and the priorities of its Country Strategy Paper 2025–2030.
President and deputy prime minister set out priorities
President Hassan Sheikh Mohamud told the opening session that the federal government is committed to development finance taking a long-term view, creating sustainable markets, strengthening the private sector and directing investment toward productive sectors. Deputy Prime Minister Salah Jama argued that the transition requires building domestic capacity rather than simply replacing aid, and outlined a model to mobilise public and private investment in agriculture, livestock, fisheries, renewable energy and small and medium-sized enterprises.
African Development Bank Director General for East Africa Alex Mubiru called for a more disciplined investment pipeline and greater use of risk-mitigation instruments to unlock private capital. He urged Somalia to concentrate resources on a few high-potential value chains that can create jobs and strengthen local production.
First investments under Ramad programme
At the forum, SDRB signed financing partnership agreements with Asal Microfinance, Maal Microfinance and Himilo Microfinance under its Ramad Microfinance Programme, intended to expand access to Sharia-compliant financing for micro, small and medium-sized enterprises and productive sectors. President Mohamud described the development bank's first investment as a sign of progress in rebuilding institutions. The Bank said strengthening institutions such as SDRB forms part of broader efforts to build the financial architecture, investment pipelines and partnerships needed to translate development finance into productive investment.
What agreements did the Somali Development and Reconstruction Bank sign at the forum?
It signed financing partnership agreements with Asal Microfinance, Maal Microfinance and Himilo Microfinance under its Ramad Microfinance Programme, aimed at expanding Sharia-compliant financing for micro, small and medium-sized enterprises and productive sectors.
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