Somalia has ‘made significant progress’ on financial transparency – US State Dept

Somalia has registered ‘significant progress’ in enhancing transparency in the management of public finances but is yet to meet the fiscal transparency threshold, a report by the US State Department notes.

The report observes that though Somalia did not meet the cut of countries considered to be fiscally transparent, it emerged in the league of 13 that had ‘made significant progress toward meeting the minimum requirements of fiscal transparency.’

Somalia, the report says published the end-of-year report within a reasonable period of time in addition to enacting budget and end-of-year report online within a reasonable period of time.

However, the country did not publish its executive budget proposal online until after the start of the fiscal year.

“Information on external debt obligations from 2013 to 2016 was published on the Ministry of Finance’s website,” the report says but, “Budget documents were not substantially complete.”

The report which is based on the review period of January 1 – December 31, 2018 assess a country’s fiscal transparency based on disclosure of national budget documentation (to include receipts and expenditures by ministry) and government contracts and licenses for natural resource extraction (to include bidding and concession allocation practices).

OFF-BUDGET ACCOUNTS

The report also raised the red flag over what it termed as off-budget accounts by some government ministries shielding them from audit or oversight.

Actual revenues and expenditures deviated from projections, but the government issued a revised supplemental budget estimate passed by parliament and periodic budget execution reports, increasing the credibility of information in budget documents, the report said.

The report also took issue with the office of the Auditor General for not making publicly available review of the government’s accounts though it submitted them to parliament.

Agreements on oil revenue sharing between the Federal Government and the Federal Member States was however hailed as progress in addition to ‘making public about the information on the award of fishing licenses to Chinese companies and also included it in the official government budgeting documents.’

The report made the following recommendations:

• making the executive budget proposal public when it is submitted to parliament,
• making information on domestic debt obligations publicly available,
• including all revenues and expenditures in the budget,
• eliminating off-budget accounts or subjecting them to adequate oversight and audit,
• producing audit reports of the government’s executed budget and making them publicly available,
• awarding natural resource extraction contracts and licenses in a manner consistent with law or regulation, and
• Making basic information on all such awards publicly available.

US State Department