Two-thirds of bilateral aid to Somalia govt stolen, divertedBy RASNAH WARAH for The East African | Sunday, July 22   2012 at  15:55

Successive Somali governments have not accounted for nearly $238 million, the bulk of which constituted bilateral assistance, according to an audit report made available exclusively to The EastAfrican.

The report shows that over the period 2000-2011, the first Somali Transitional National Government and the subsequent Transitional Federal Government 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.

The author of the report, Abdirazak Fartaag, who was head of Somalia’s Public Finance Unit in prime minister Omar Abdirashid Sharmarke’s office from May 2009 to September 2010, and prime minister Mohamed Abdullahi Farmaajo’s office from December 2010 to May 2011, claims that various Somali administrations misappropriated and mismanaged millions of dollars in donor assistance and domestic revenue by under-reporting the amounts received and by utilising funds on personal and other non-government expenses.

The Public Finance Unit was initiated by prime minister Sharmarke in 2009, in order to enhance the financial reporting of the Transitional Federal Government and to co-ordinate the central bank and the auditor general’s and accountant general’s offices. The unit was disbanded by prime minister Farmaajo in May 2011.

Fartaag’s report (which has not yet been released, but was made available to The EastAfrican) comes in the wake of another damning report released by the World Bank in late May, that claims that the TFG did not account for $130 million in revenues and donations it received in 2009 and 2010.

The report’s author, Joakim Gundel, said 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.

A leaked copy of the 2012 report of the Monitoring Group on Somalia and Eritrea — a group mandated by the UN Security Council to monitor arms embargo violations — shows similar gross under-reporting of finances by the Somali government. (The report is expected to be presented to the UN Security Council sometime this month.)

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 the money may have 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 PricewaterhouseCoopers, that was established with donor support as a confidence-building measure.

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