New report sheds light on how $1 bln was stolen in Somalia

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Despite multiple efforts to combat corruption, a recent report by the UN Monitoring Group on Somalia said that the systematic misappropriation, embezzlement and outright theft of public resources have essentially become a system of governance in Somalia.

by Judy Maina, judy.maina@alleastafrica.com

NAIROBI – A new report by Abdirazak Fartaag, who was head of Somalia’s Public Finance Management Unit exposed a high-level corruption cover-ups, financial mismanagement and budget diversions by Somali officials ahead of a presidential election scheduled to take place on November 30.

The report raises serious questions about the relationship between the federal government and the international community in Somalia, and the effects of the lack of a ‘harmonized’ development agenda, revealing the existence of shadow groups – foreign consultants, Islamist leaders (cartels), and domestic/external budget support diversion advisors – secretively exerting unchecked influence in Somalia aimed at serving their own political gains.

According to Fartaag who is now the Chief Executive Officer for Fartaag Research and Consulting, the “financial failure goes hand-in-hand with security failure, a scenario which moved into a political failure in Somalia.”

“The budget revenue mismanagement pre-empted the transformation process due to the lack of structured control systems and this is in spite of the relative adequacy it provides.” The new report issued this week said.

“The systems were to be developed by the federal government and international community but none of them undertook such initiatives. Indeed, the mismanagement is used for fueling further anarchy. The government has not structured her ministries and civil servants to embrace successful transformation.”

SYSTEMATIC DIVERSION

The report stated that the reconciliation budget allocated for the period of 2013 to 2015 was $1,168,379,299 and net expenditure by the government was US $163,766,637, with $1,004,612,662 (86 percent of the total federal budget were diverted and utilized in shadow programme activities including private insurgencies, private investments, Islamic institutions, regions, and by parliamentarians, a fraud which the report said has been fueling further anarchy in the country.

“The diversions occurred when the integrity institutions were all in place but President Hassan Sheikh Mohamud compromised them in regards to public disclosure.” The report said.

Fartaag had however questioned why the international community did not come on board to formulate budget control systems in view of the fact that the country was still in failed status.

INTERNATIONAL COMMUNITY

Somalia and North Korea top World's most corrupt states index
Somalia and North Korea top World’s most corrupt states index

The new report also found that the international community (Western Nations) has been soliciting development support to the country and these funds have not been factored into the country’s budget, saying that the amount of donor pledged support in 2013 was US $2.4 billion with the actual pledge received and registered from the amount is only known by the international community.

The multilateral support received from the international community and for the country’s transformation development is also not public knowledge due to its lacking transparent accountability, the report said.

“Their disbursements are directly funneled to the non-state-actors who lack budget accountability management.” The report said.

The report also accused the international community of working to outsource funds meant for Somalia to their own organizations [Western Led Cartels].

CARTELS

The report named some actors it claimed are being outsourced with the Somalia budget as Multilaterals, International NGOs, Local Non-StateActors, Human Rights Watch, Media Outlets, Amateur Foreign Consultants and the Western-Led Cartels (WLC).

Foreign consultants contracted to improve Somalia’s budget and oversight management have also been accused of failing to report on the actual problems faced in regards to implementing the revenue and expenditure provisions.

“In this context, the international community appointed the Financial Governance Committee. However, it appears that this body has also failed to report on the budget irregularities it has come across.” The report stated.

FOREIGN CONSULTANTS

The report also claimed that Sahan Research, a foreign consultancy firm operating in Somalia serves as a clear example of foreign consultants‟ abusive power, mismanagement and lack of transparency in Somalia.

Sahan Research, which also operates as Sahan Africa Ltd and Sahan Foundation, has been active in Somalia and in East Africa since 2012. It was initially set up for Matt Bryden who at the time was still working for the UN SEMG by the British expatriate, David Hopkins.

Mr. Bryden had previously been declared persona non grata (PNG) by the former president of Somalia, Sheikh Sharif Ahmed.

KEEPING INCUMBENT PRESIDENT IN POWER

According to the report, Sahan Research which claims its main activity is Third Party Monitoring for the donor community in Somalia of running obscure and less publicized activities including political support to the Somalia Federal Government, in particular to President Hassan Sheikh Mohamud.

“This also includes a controversial contract to keep President Hassan Sheikh Mohamud in power beyond 2016.

Citing diplomatic sources in Nairobi, the report said that Matt Bryden was responsible for drafting a concept note to keep the current Somali president in power, funded by the United Arab Emirates (UAE).

DAHABSHIIL ACCOUNT  

According to the report, an investigation by UK revealed that Sahan Research operates a Barclays Bank account, and in Somalia it banks with Dahabshiil, one account held in Mogadishu and Hargeisa.

“Discussions with a Sahan finance employee put forth that funds for specific projects and contracts are purposely “moved around” between the above accounts with the aim of concealing funds. In one instance funds from a European donor government were irregularly “moved around” by Sahan finance team in 2015.” The report alleged.

Somali government spokesman could not be reached for comment when contacted by an Alleastafrica reporter on Monday.

Despite multiple efforts to combat corruption, a recent report by the UN Monitoring Group on Somalia said that the systematic misappropriation, embezzlement and outright theft of public resources have essentially become a system of governance in Somalia.

Somali government had routinely denied the accusations, and labelled them as ‘unfounded’.

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1 COMMENT

  1. Subject: “New report sheds light on how $1 bln was stolen in Somalia by Judy Maina, 31 Oct 2016″

    Commentary, 31 Oct 2016
    Reading the headline was enough for me! I was helplessly dejected and left with that immortal lamentation: CRY, MY BELOVED AFRICA. What else is there to say.
    I also read, at http://www.allafrica.com, a news item entitled: “UK Firm to Build U.S.$1 Billion Resort in Zanzibar, by Syriacus Buguzi, 24 Oct. 2016.” I cannot help musing whether the mega project would ever come to reality and, even if miraculously it comes to fruition, I doubt that it will ever serve the people of Tanzania in a meaningful way. It is just my feeling based on so many sad stories about our Africa.
    What is amazing, by the way, is the coincidence of the amount of money involved in each country [one billion US Dollar in each case] Oh! Africa, the unlucky “dark” Continent! If I sound harsh, it is out of sadness.

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