On last Monday (22/11/17) Somalia’s finance minister announced his 2018 budget. In his statement,
He explained how they would spend the budget as well as where they expected this year’s income. In addition to the 620 million expected to be collected in taxes, the minister disclosed further 62.3 million expected from three countries: Saudi Arabia 32 million, Turkey 20 million and Qatar 10 million.
However, the contributions from the UN and the West, which are the main backers of the government and its biggest financers, were not included in the budget so where the western donor’s money gone and why is it not in the budget? The answer is that their money cannot be counted on because of two reasons.
Firstly, the west believes that Somalia’s finance management systems are too weak to permit budget support thus, they use other ways to deliver their assistance and support the government. For example, in 2016, Somalia received US$ 1.3 billion –two times of the government budget- as Official Development Assistance (ODA).
Only 8% of this money was channelled through the Somali treasury and the rest was delivered through donor agencies and their partners. Not all the 8% was independently managed by the treasurer but 92% of it (50.4 million) was delivered through these channels: “projects financed through the World Bank Multi Partner Fund (MPF), general budget support provided by Saudi Arabia and sector budget support provided by Turkey”.
The second reason is unpredictability. Even the small fraction that the donors allocate to fund through the government cannot be relied on. In 2015, the international community planned to deliver 15% of the ODA of 2016 through the treasury but that fell to only 8% as explained above. This is because contributions from the West come with series of conditions which require being met before their dispensations, thus making it unreliable as no one sure whether these conditions will be met or not.
Moreover, Western donors constantly review their aid budget and make changes their objectives and priorities according to their wishes rather the recipient’s needs. This means, if one donor changes its aid policy towards your country or its priority moves from your country to another, what you were expecting from them would be reduced at best if not cancelled it all.
What makes, even more, harder for the ministry to meet the attached conditions is that the donors are not united in what they provide. For example, the $1.3 billion that Somalia received last year was paid by 45 different organisations representing different countries and the UN. Each of these organisations demands its own discussion, designing and their particular rules, procedures and approaches. Therefore, the possibility of receiving anything is minimal. The main underlying reason of why the international community does not channel aid through the Somali treasury is that the donors perceive that widespread corruption flourishes in the country.
This negative perception of the West, which becomes an excuse for not directly infusing ODA into the treasury, is not pertinent to Somalia. Over 75% of donor support in Africa is provided as project aid rather than through government budgets. This forced many African countries not to count on the donors’ support. Uganda, for example, which is a long-standing large recipient of aid, discounts up to 50% on donor commitment. Similarly, Ethiopia, which is believed to be the least corrupt country in Africa, discounted several times up to 75% of the European Commission Aid expecting only 25% to arrive on time.
Although donor governments have every right to know where and how their taxpayers’ money is spent, the current method does not guarantee that every penny ends up in the right hands thus reaching the intended people. But it is undermining the Somali government, as the unpredictability of aid makes hard for it to deliver its services.
Somalia stands today where Rwanda was standing when the current regime came to power in the mid 1990s. That time the international community was nervous about Rwanda. The country just emerged from the devastating civil war, which claimed the lives of million people within three months and destroyed all government institutions.
The new rulers were minority elites with no track record of governance and plenty of reasons for feeling vengeful against the Hutu majority who massacred their fellow Tutsi. Hence every country was reluctant to get too close and finance its budgets directly instead they chose the easy options: in the words of Giles Bolton “do few projects, continue to meet humanitarian needs, fund other bits and pieces here and there” -exactly as they are doing now in Somalia.
It continued in this way until UK government took a bold and brave decision in the 2000s, in which it started to provide a long-term support direct to the Rwandan government’s budget. That move became a gamble worth taking since it encouraged other donors to follow and provided Rwanda for the funding it required to rebuild itself.
Somalia is rebuilding gradually and its institutions are improving year by year but without receiving from its international partners the necessary funding to deliver the services that Somali people desperately need, it will be hard for it to win the support of its people and speed up the recovery process. Therefore, a country, which, like the UK in Rwanda, takes the lead and provides the financial support that Somali government needs is central to its success.
Ibrahim Aden Shire
BA in International Development