Investing Rural Corridor Roads

Through Private-Public Partnerships & Blended Finance

beige metallic truck on road during daytime

Importance of Rural Infrastructure

Rural roads are essential for connecting rural and urban communities. They enable the efficient and affordable movement of goods and services, support trade and economic growth, and improve access to schools, healthcare, and other essential services..

In Somalia, poor rural roads remain a major barrier to economic growth. Many farming and pastoral communities are isolated from markets, making transportation slow, costly, and unreliable, especially during the rainy season when roads often become impassable. Weak road networks also contribute to high post-harvest losses. According to a 2018 assessment by the World Bank and the Food and Agriculture Organization (FAO), Somalia loses an estimated US$20 million annually due to poor transport infrastructure, weak market linkages, limited storage, and inefficient supply chains. These losses reduce farmers' incomes, undermine food security, and constrain the growth of the agricultural sector.

Somalia Infrastructure Fund (SIF)

Investing in rural infrastructure has long been recognized as an economic and social development strategy. SIF identified the rehabilitation of rural roads as a key priority because roads are the lifeline that connects farmers, and producers to markets in urban areas. When roads are in good condition, rural communities can get their products to markets more quickly and at lower cost, reducing waste and earning better incomes. Better roads also help villages, small towns and secondary cities grow by making it easier for businesses to operate, services to expand, and people to travel. As connectivity improves, the private sector is more likely to invest in farming, agri-processing, transportation, and other rural enterprises.

The Somalia Infrastructure Fund, established in 2016, brings together funding from multiple donors to support the rehabilitation and development of Somalia’s key economic infrastructure. The African Development Bank (AfDB) manages the rural infrastructure pillar of SIF. In collaboration with the Federal and State Governments, AfDB is focused on laying the foundation for long-term rural infrastructure development by strengthening institutional capacity, improving planning systems, and supporting the development of policies and frameworks needed to deliver sustainable infrastructure investments.

Over nearly a decade of operation, the AfDB has helped strengthen Somalia’s infrastructure planning and institutional capacity through a range of public-sector investments. However, progress in improving rural road connectivity has not kept pace with the country’s growing needs. Many rural communities remain poorly connected, making it harder to access markets and essential services, increasing transportation costs, limiting trade opportunities, and contributing to significant post-harvest losses.

While the SIF framework has recognized the private sector participation of Somalia's broader economic development agenda, AFDB's implementation strategy has largely focused on working with public institutions to deliver infrastructure projects. There has been comparatively less emphasis on developing structured mechanisms to attract private investment in infrastructure through Public–Private Partnerships (PPPs), concession arrangements, or blended finance models.

New Implementation Strategy is needed

The current implementation model was largely focused on strengthening government institutions as the primary drivers of infrastructure delivery. This model has its own limitation including government financial constraints, technical capacity, procurement processes and long-term maintenance capabilities. As a result, infrastructure investments may take longer to implement, remain dependent on donor financing, and face challenges in achieving sustainable operation and maintenance.

A new approach is needed - shifting from government-led infrastructure delivery to a partnership-based investment model. Under this approach, the role of SIF evolve from primary financing public infrastructure projects toward facilitating Public-Private Partnerships (PPPs), blended finance and commercially viable infrastructure investment. Thus, creating an enabling environment for private sector participation.

Across Africa, many countries (Kenya Transport Infrastructure, South Africa and Mozambique 4N Toll Road and Senegal-Diamond Road) have adopted Public–Private Partnerships (PPPs) and blended finance approaches as practical mechanisms to address infrastructure financing gaps, improve service delivery, and accelerate economic development.

PPPs allow AfDB and governments to partner with private companies to finance, design, construct, operate, and maintain infrastructure over a long-term contractual period. The private sector brings investment capital, innovation, technology, and management expertise, while governments provide policy direction, regulatory oversight, and public interest protection.

Failure to deliver rural infrastructure projects in a timely manner creates a significant risk that available SIF funding will be depleted without achieving meaningful improvements on the ground. Delayed implementation can result in escalating costs, loss of economic opportunities, and continued isolation of rural communities. A strong focus on project management, accountability, and implementation capacity is critical to ensure that funding translates into restored infrastructure, improved connectivity, and sustainable economic development.

About the Author

Abdi Siyad Omar is an Architect and Urban and Regional Planner with over 25 years of international experience in land, natural resources, and environmental planning. He has worked with the United Nations and the World Bank on major infrastructure and water projects in Somalia and Angola, Afghanistan, Pakistan and with Alberta Environment in Canada on land and water management. His work focuses on sustainable development, project management, evaluation and monitoring, Environmental and social impact assessment, climate resilience, and community-driven planning.