International Finance Corporation2025-01-212025-01-212025-01-21https://hdl.handle.net/10986/42708This Country Private Sector Diagnostic (CPSD) was conducted at a challenging but promising juncture in Somalia’s development journey. Because the Federal Government of Somalia’s (FGS’s) fiscal space and institutional capacity to deliver public goods and services are limited, marshaling the private sector for development outcomes is crucial. Thus, there is an urgent need for a diagnostic that explores the most viable path toward the type of broad-based private sector-led growth that will help Somalia move away from its current predicament. To this end, and in line with the established World Bank CPSD methodology, this report provides an impartial assessment of the state of the private sector, analyzes cross-cutting and sectoral constraints to private sector development, recommends policies and reforms to mitigate these constraints, and identifies opportunities for increased private sector engagement in the country. The analysis and recommendations of the CPSD will inform Somalia’s reform agenda despite the scarcity of information in the country. By assessing critical constraints to the private sector and identifying the policies and regulatory reforms needed to unleash private investments with strong development impact, the CPSD lays the foundation for an integrated response that includes both private and public sector perspectives, expertise, and solutions. Thus, the CPSD will inform the World Bank country engagement process in Somalia, with its insights and recommendations aligned with and integrated into World Bank strategic documents like the risk and resilience assessment and the country partnership framework. The CPSD can also be leveraged to inform the Somali government’s broader reform agenda, such as the National Development Plans, and facilitate the engagement of various stakeholders in the process.en-USCC BY-NC 3.0 IGODEVELOPMENTPRIVATE INVESTMENTPRIVATE SECTORBUSINESS AND TRADE ENVIRONMENTNATIONAL DEVELOPMENT PLANSGOVERNMENT REFORMSPRIVATE SECTOR DEVELOPMENTReportWorld Bank10.1596/42708