During the first period of Hassan Sheikh presidency, there was Systemic corruption and the large-scale misappropriation of state funds by governing officials is the norm in Somalia. During 2013 and 2014, for instance, the Central Bank was severely criticised for the fact that 80% of withdrawals from the state accounts were made by individuals and not used to fund government operations or the provision of public services. Instead, funds were used for private gain, channelled into slush funds and used to shore up political support through patronage networks. The then president and some of his associates were also accused of using the central bank to siphon off assets abroad. The public scandal led to the resignation of the governor of the Central bank in mid-2013.
Somalia Must Explain Missing Cash before Receiving More Foreign Aid
Reports have now emerged that $18 million in aid from the European Union, Saudi Arabia, and the United Nations have disappeared. The government received the funding, but it did not pass through the Treasury’s account at the Central Bank. $18 million might not be a pittance compared to the total aid Somalia receives, nor is it the only money that has disappeared. Transparency International has listed Somalia as the world’s most corrupt country for 16 years running. But, that $18 million could be a useful test for Prime Minister Hassan Khaire as he comes to Washington to ask for even more aid from the World Bank and International Monetary Fund.
Pompeo and every senator on the Senate Foreign Relations Committee should demand that President Mohamed Farmajo and Khaire account for the $18 million before Somalia receives any more assistance. There was a chain of custody for that money, and it should not be difficult to determine through whom it last passed and who along its path lives above their means.
Leaked copy of the 2012 report of the Monitoring Group on Somalia and Eritrea
The report by the UN Monitoring Group says 70 per cent of money earmarked for development and reconstruction has disappeared. The report shows that over the period 2000-2011, the first Somali Transitional.
National Government and the subsequent Transitional Federal Governments received bilateral aid totalling $308 million that was given mainly by Arab countries, including Saudi Arabia, Sudan, Libya, Kuwait, Oman, Qatar and the United Arab Emirates. (This figure does not include funds that came through the Arab League. It also does not cover multilateral assistance to Somalia, which is managed entirely by the United Nations Development Programme.) Only $53 million was raised domestically during this period, mainly through the Mogadishu port and airport. However, successive governments have only been able to account for $124 million – or one-third – of the total bilateral and domestic funds they received.
TFG did not account for $130 million in revenues and donations it received in 2009 and 2010. The report’s author, Joakim Gundel, said that auditors found that the government had collected at least $94 million in revenue in 2009, but only reported $11 million. The report states that in 2010, the government collected $70 million in revenues but reported just $22 million. The Group’s own investigations show that an additional $40 million of potential revenue may have gone uncollected or unaccounted for in 2011. President Sheikh Sharif Ahmed is quoted saying that perhaps the money never reached Somalia and was “perhaps in the pockets of other people”. The report further states that one quarter of the funds that can be accounted for are channelled through the offices of the President, Prime Minister and Speaker of Parliament. In 2011, these three offices spent more than $12.6 million, representing almost 23 per cent of total government expenditure – almost as much as was spent on the TFG security forces ($13.4 million) or the expenditure of all the ministries combined ($15.4 million). The report further states that the TFG leaders have generally shunned a funding mechanism managed by Price Waterhouse Coopers, which was established with donor support as a confidence-building measure. It says that the fundamental problem with the Transitional Federal Institutions is that “their leaders have successfully marketed the government’s weakness, fragility and possible collapse as a lure to attract more assistance”. As a result, “corruption, embezzlement and fraud are no longer symptoms of mismanagement, but have in fact become a system of management.
Also, the Mogadishu port is under the control of the president, who can decide how revenue raised from the port is to be allocated. This has created huge opportunities for corruption. In 2009, for instance, the port generated $24 million, according to Fartaag, but the Office of the Auditor General only registered $6.2 million of it. In 2010, the port generated $30 million but only $12 million was reported; of this amount, more than half went to the Office of the President for expenditures that have yet to be disclosed.
