Somalia lost $1b to graft

Somalia's President Hassan Sheikh Mohamud. FILE PHOTO | AFP 

By FRED OLUOCH

In Summary

• In the report titled Breaking Point in Somalia: How state failure was financed and by whom, the whistleblower says the government receives and spends more money from donors and domestic revenue than they account for. 
• Government’s expenditure for the three years stood at $169 million, while Mr Fartaag’s reconciliation stands at $1.2 billion, which means over $1 billion is unaccounted for.
• But Daud Aweis, the spokesperson at the Office of the President, dismissed the allegations saying that; “Fartaag is well known as a person who is politically motivated and produces false allegations. His allegations do not deserve any attention.”

A former top financial manager in the Somali government has released a report detailing how over $1 billion was diverted from the national budget between 2013 and 2015.

Abdirazak Fartaag worked as the head of the Public Finance Management Unit between 2009 and 2011 and his report was released on October 26.

In the report titled Breaking Point in Somalia: How state failure was financed and by whom, the whistleblower says the government receives and spends more money from donors and domestic revenue than they account for. 

“The deliberate deficiencies of the government in developing functional structures and accountable management controls have been conduits for budget diversion. The money is used to fund insurgencies, private investments and Islamic institutions, which fuels further anarchy in the country,” said Mr Fartaag.

For instance, the government’s expenditure for the three years stood at $169 million, while Mr Fartaag’s reconciliation stands at $1.2 billion, which means over $1 billion is unaccounted for.

“Money from western and Arab donors, and domestic revenue are normally under-declared and expenditures inflated to allow diversions to local and international non-governmental organisation’s owned by politicians,” said Mr Fartaag.

But Daud Aweis, the spokesperson at the Office of the President, dismissed the allegations saying that; “Fartaag is well known as a person who is politically motivated and produces false allegations. His allegations do not deserve any attention.”

Mr Fartaag — who was in the PM’s office during the Transitional Federal Government and has been writing regular reports since 2012 — said members of parliament, local militias, private universities and Islamic organisations with links to Somalia’s leadership are also beneficiaries of the diverted funds. 

Oversight institution

“There is lack of oversight institutions and this is deliberate. The Central Bank and the Ministry of Finance are controlled by the president, while the Auditor-General does not produce annual reports on government expenditure,” said Mr Fartaag.

In a recent interview with The EastAfrican, President Hassan Sheikh Mohamud said that since he took over in 2012, the country has established prudent regulations and passed various legislation for financial governance such as investment laws, procurement and audit laws and Anti-Money Laundering and Combating the Financing of Terrorism.

READ: Q&A with Somalia's President Hassan Sheikh

“We have established a public finance management system that is sound and has been tested by our international partners; we also streamlined tax collection,” said President Mohamud.

Mr Fartaag, who is currently the chief executive of the Fartaag Research & Consulting firm based in Nairobi, calls for a continental audit by the African Union.